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FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5
reply to ptrowski

Re: Usage billing NOT just because of more revenue

said by ptrowski:

said by karlmarx:

Hmm. I have a degree in Accounting from Syracuse. A 5 year maintenance contract purchased the same time as the equipment is amortized over 5 years. In fact, in our ASSETS, we list the value remaining on the maintenance contracts. The capital is consumed over the course of the year. They are an EXPENSE when the year is up, but they are NOT an operating cost. Operating costs are the cost to maintain the network, not replacement of capital equipment.
Please reply once you get a degree in accounting.
Game, set, match.
Uh NO!
»www.northwestern.edu/equipment-i···faq.html
What is Capital Equipment?

Capital equipment is tangible property having an acquistion value of $5,000 or more and a useful life expectancy of more than one year. Group purchases of tangible property that individually have acquisition values of less than $5,000 are not considered capital equipment and will be expensed. Fabricated equipment, which has an aggregate cost of $5,000 or more and a useful life expectancy of at least one year, is considered capital equipment. Repairs, maintenance parts or components, warranty costs, maintenance contracts or annual software licensing fees are not considered capital equipment and will be expensed.

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My BLOG .. .. Internet News .. .. My Web Page



karlmarx

join:2006-09-18
Chicago, IL

2 edits

1 recommendation

Wow. You posted the EXACT ANSWER IN your first line, yet you still don't GET IT.

So, our maintenance contract which COSTS $30,000.00, and is good for 5 years, has a VALUE of more than $5,000.00. That means it's $6,000.00 per year.

Now, year 1, you have a CREDIT of $30,000.00 to your bank account, so obviously you need to have a $30,000.00 DEBIT somewhere. Lets see, where can we DEBIT $30,000.00? Can we EXPENSE the $30,000.00. Sure, we could. But.. But... the contract, after year 1, is still good for 4 more years! Oh, wait, that's $24,000.00 of VALUE. So, we still have $24,000.00 of VALUE left after the first year. Hmm...

I know, what we CAN do, is we can EXPENSE the $6000.00 of VALUE that we lost in year 1, but we still have somthing worth $24,000.00 left, that we need to DEBIT somewhere. Let's see. Hmmm.

So, what DO we do? I know! We create a CAPITAL ACCOUNT to put the remaining $24,000.00 in! That way, as ALL ACCOUNTING MUST DO, we keep the numbers in BALANCE. The $24,000.00 IS A CAPITAL ACCOUNT. And each year, we can EXPENSE $6000.00, and offset the CAPITAL ACCOUNT.

What you posted is for ITEMS with a value of LESS than $5000.00. I never SAID it was CAPITAL EQUIPMENT, I said it was CAPITAL. Which it IS. You CAN CAPITALIZE maintenance contracts, it's done ALL THE TIME for multi-year contracts. IF IT WAS a 1 year maintenance contract, then YES, it would be considered an expense. But high end equipment is almost NEVER sold with just 1 year contracts.
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Remember 1 in 4 people are retarded. 25% of Americans are Republican. Coincidence? I don't think so.



Matt3
All noise, no signal.
Premium
join:2003-07-20
Jamestown, NC
kudos:12

Man, the caps totally help me understand. Thanks.


jazzy1124

join:2003-12-05
Fargo, ND

2 recommendations

reply to karlmarx

No TK is right, whether you want to believe it or not, there is more than just AT&T that hosts all of the Internet sites. I am sure that AT&T has no problem giving you unlimited access to devices connected to their network. As because in this case you are marginally right, however more than electricity is required to increase capacity to the levels required to passify ton's of bonehead iPhone users. You need more pipe between towers which means either... plow more copper, lease more copper, install more wireless gear and pay for frequency licensing. And then once you do reach AT&T's core, you need to increase capacity to the other Tier 1 provider's facilities. In this capitalist corparatist economy, nothing is free and everything costs. The more gear you install, the more failures you have, the more technicians you have to hire to be able to keep the network running, the more gear you need to buy to replace the failing gear. As I have thought this out, even increasing capacity to just AT&T's core would cost way more than electricity.

The most technologically illiterate people I know are accountants, so this title means nothing towards credibility in this thread.

While I do not favor paying usage myself, I think usage rates would vastly improve the experience overall...... A music thief isn't going to connect his phone to his computer if it would be cheaper to buy the damn CD.

I am currently an Alltel user in the territories about to be taken over by AT&T, and I fear the bigger issue of no 3G available period because we don't have enough population to "Pay" for it. I may just drop my phone service all together because I hate Verizon, Sprint's coverage is worthless, and AT&T's coverage is worthless (at this time they have didly squat in rural areas) I'll go back to a CB if I have to



karlmarx

join:2006-09-18
Chicago, IL

Hmm.. CB, I guess that means you must be a redneck. I am an accountant by education, but I've been a network engineer/manager/director for the last 20 years, so I'm pretty sure I know what I'm talking about. Hell, I worked for a company that MADE phone switches, so I know about those too. You are correct though, the cost for the evil empire to provide DATA services is FAR HIGHER than the cost to provide voice services. A single 'data' user can suck up more bandwidth than 100 voice users. Lets see, we can charge $50.00 for 100 people to use it, or we can charge $60.00 for 1 user to use it. Do the math, it's not the CUSTOMER RAPE of pricing it used to be.

Of note though. A music thief is someone who shoplifts. A music infringer is someone who downloads. Big difference, as one denies the owner the ability to sell something, while the other is just copying bits, without ever affecting the original.
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Remember 1 in 4 people are retarded. 25% of Americans are Republican. Coincidence? I don't think so.



morbo
Complete Your Transaction

join:2002-01-22
00000
Reviews:
·Charter
reply to jazzy1124

Making cars illegal will also eliminate traffic jams, but that doesn't mean it accomplishes the goal in the best way possible.

What would really "improve the experience overall" is not caps but proper network investment. AT&T half-assing it is a terrible business plan, but unfortunately, it seems to be an integral part of their corporate culture.