This is a multi-part message in MIME format. --part0_889908419_boundary Content-ID: <xxxxxx@inet_out.mail.aol.com.1> Content-type: text/plain; charset=US-ASCII Dear resadm-l-ers, I have been, up to now, a lurker on this list and forwarded an email to someone who is on a diiferent list I am subscribed to. His name is *Doc* Don Taylor and his email address is <xxxxxx@visi.net>. His response is below. JR John Rodrigues xxxxxx@aol.com --part0_889908419_boundary Content-ID: <xxxxxx@inet_out.mail.aol.com.2> Content-type: message/rfc822 Content-transfer-encoding: 7bit Content-disposition: inline Return-Path: <xxxxxx@visi.net> Received: by air10.mail.aol.com; Sat, 14 Mar 1998 13:05:52 -0500 Received: by relay08.mx.aol.com; Sat, 14 Mar 1998 13:05:51 -0500 (EST) Received: by mail4.visi.net; Sat, 14 Mar 1998 13:06:12 -0500 (EST) Date: Sat, 14 Mar 1998 13:06:12 -0500 (EST) Message-Id: <xxxxxx@mail.visi.net> X-Sender: xxxxxx@mail.visi.net X-Mailer: Windows Eudora Light Version 1.5.4 (16) To: JohnR999 <xxxxxx@aol.com> From: "'Doc' Don Taylor" <xxxxxx@visi.net> Subject: Re: Fwd: Year 2000 Compliance Mime-Version: 1.0 Content-type: text/plain; charset=US-ASCII Content-transfer-encoding: 7bit I may have some facts and opinion relevant to some of the questions: 1. How to account for the repair costs. Way back in 1996 the Emerging Issues Task Force (EITF) of the Federal Acounting Standards Board (FASB) ruled that in general costs related to fixing the Y2k problem must be expensed. FASB (EITF Discussions) - Issue 96-14: ACCOUNTING FOR THE COSTS ASSOCIATED WITH MODIFYING COMPUTER SOFTWARE FOR THE YEAR 2000 - Paragraph #5 "...At the July 18, 1996 meeting, the Task Force reached a consensus that external and internal costs specifically assocaited with modyfying internal-use software for the year 2000 should be charged to expense as incurred." While you may argue that this is equipment, not software, it can also be argued that it is the internal software, not the actual equipment, that has to be changed. There is reportedly two FASB documents related to this, as reported in this post from my archives: The FASB EITF's summary Issue: 96-14 identified below is actually one of TWO difinitive FASB documents that pertain to Y2K accounting practices. The other was drafted by FASB's Accounting Standards Exexutive Committee (AcSEC). It was released as a proposed Statement of Position on 12/17/1996 (I'm in the date expansion camp <g>) and is entitled "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use." Page 14, Paragraph 24 of the proposed SOP: <snip> "Costs of significant upgrades and enhancements to internal use computer software should be capitalized if it is probable that those expenditures will result in significant additional functionality or a significant extension of the software's useful life." [The document then specifically states that "This SOP does not change the conclusions reached in EITF Issue No. 96-14"] The bottom line pertaining to Y2K costs: 1. EITF's 96-14 defines in-place Y2K renovations as normal maintenance and mandates that the costs for such must be expensed as incurred. 2. AcSEC's SOP declares that software which is intended for internal use (i.e., not for resale), whether developed from scratch of acquired from a vendor, should be capitalized and amortized over the software's useful life. So if you achieve Y2K compliance by rewriting systems or buying packaged solutions, you can capitalize. 3. AcSEC's SOP, as identified above, also provides "wiggle room" for capitalization if you significantly enhance your systems or significantly extend their useful life during Y2K renovation. But just doing an in-place renovation does not fall under FASB's definition of "significantly extending useful life." So if you add lots of new features or re-architect (e.g., convert your IMS data to DB2, re-architect to Client/Server), you can almost certainly capitalize. Your finance people need to be all over this issue. I am not an accountant but a concerned Y2k management consultant. My personal recommendation is to have your accounting people involved, and make sure they are aware there are specific guidelines for Y2k accounting. (The IRS has their own as well.) If you need to contact FASB, my archives show the FASB contact is: Timothy Lukas FASB 401 Merritt 7 P.O. Box 5116 Norwalk, CT 06856 2. As to who should carry the burden of making the equipment compliant, your best hope is to try to make this a cooperative effort. Both the awarding agency and the institute benefit from the proper and continued use of the equipment, without which the project may be endangered. However, I do not know if there are any specific guidelines on this. 3. Who should lead the charge to assure that sponsored research activities and deliverables will not be adversely affected by the year 2000? Each institution/organization should have a Year 2000 Program Manager. This person should *not* be from the IT department as this is both a management and technology issue. They should be someone with sufficient authority to cover all parts of the organization. In larger organizations you should consider having a working group of representatives from all departments/divisions to ensure you get subject matter expertise for each. But definitely avoid ego and political battles - they are counter-productive. Hope this helps. Some educational institution reference sites: o <http://main.ouhsc.edu/2000/> o <http://www.asu.edu/it/fyi/computingnews/issues/Fall97/ articles/research_y2k_1.html> [put both lines together to get full URL] Doc At 12:06 PM 3/14/1998 EST, you wrote: >Content-ID: <xxxxxx@inet_out.mail.aol.com.1> >Content-type: text/plain; charset=US-ASCII > >Another email from that thread... > >JR >Content-ID: <xxxxxx@inet_out.mail.aol.com.2> >Content-type: message/rfc822 >Content-transfer-encoding: 7bit >Content-disposition: inline > >Return-Path: <xxxxxx@health.state.ny.us> >Received: from rly-za05.mx.aol.com (rly-za05.mail.aol.com [172.31.36.101]) by > air-za05.mail.aol.com (v40.7) with SMTP; Sat, 14 Mar 1998 10:50:22 > -0500 >Received: from gate1.health.state.ny.us (gate.health.state.ny.us > [192.135.176.62]) > by rly-za05.mx.aol.com (8.8.5/8.8.5/AOL-4.0.0) > with SMTP id KAA26310; > Sat, 14 Mar 1998 10:50:19 -0500 (EST) >Received: by gate1.health.state.ny.us id AA19973 > (InterLock SMTP Gateway 3.0); Sat, 14 Mar 1998 10:20:12 -0500 >Message-Id: <xxxxxx@gate1.health.state.ny.us> >Received: by gate1.health.state.ny.us (Internal Mail Agent-2); > Sat, 14 Mar 1998 10:20:12 -0500 >Received: by gate1.health.state.ny.us (Internal Mail Agent-1); > Sat, 14 Mar 1998 10:20:12 -0500 >Date: Sat, 14 Mar 1998 09:15:16 -0600 >Reply-To: Research Administration Discussion Group > <xxxxxx@health.state.ny.us> >Sender: Research Administration Discussion Group > <xxxxxx@health.state.ny.us> >From: "Higginson, David A" <xxxxxx@EXCHANGE.UAMS.EDU> >From: Research Administration Discussion Group > <xxxxxx@health.state.ny.us> >X-From: "Higginson, David A" <xxxxxx@EXCHANGE.UAMS.EDU> >Subject: Re: Year 2000 Compliance >X-To: Research Administration Discussion Group > <xxxxxx@albnydh2.health.state.ny.us> >To: Multiple recipients of list RESADM-L <xxxxxx@health.state.ny.us> >Mime-Version: 1.0 >Content-type: text/plain; charset=US-ASCII >Content-transfer-encoding: 7bit > >We have been going through the yr 2000 process and identifying equipment >that will need to be replaced, retired, or updated in order to handle the yr >2000 issue. The interesting issue to me is who should carry the burden of >making a piece of research equipment yr 2000 compliant. If it was bought >using federal funds from an award that will still be active on 1/1/2000 >should the it be charged to the award, or picked up by the institute? Is >this an allowable expense for the indirect cost calculation? Also, should >you capitalize such an expense based on the fact that value is being added >that will last for x years, or do you treat it like a repair and expense it >? > >-David > >David Higginson, ACMA >Administrative Director >Arkansas Children's Hospital Research Institute >Tel: (501) 320-3757 >Fax: (501) 320-3547 >Email : xxxxxx@exchange.uams.edu >WWW : http://achri.ach.uams.edu > >-----Original Message----- >From: Suzanne Huard [mailto:xxxxxx@UNHN.UNH.EDU] >Sent: Friday, March 13, 1998 6:11 AM >To: Multiple recipients of list RESADM-L >Subject: Year 2000 Compliance > > > Those of us at UNH involved with administrative computer systems have been > hard at work ferreting out and fixing computer issues relating to the year > 2000 and feel that we are in pretty good shape wrt administrative >computing. > We are somewhat concerned about broader implications associated with >research > activity itself, and particularly with our obligations for sponsored >research > as outlined in NSF Special Notice No. 120 > (http://www.nsf.gov/pubs/1997/iin120/iin120.htm). As the document >outlines, > the danger could be lurking in electronic devices, laboratory equipment, > software running on mainframes or on individual work stations, etc. > > What, if anything, have you done to assure that sponsored research >activities > and deliverables will not be adversely affected by the year 2000. Who has > been leading the charge on this issue? Faculty advisory groups? >Sponsored > research office? VP for Research? VP for InfoSystems/Technology? Do you > have an insitutional plan/checklist for addressing Year 200 compliance? >(If > so, and if it is available on the web, the URL would be most welcome). > > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ > Suzanne Huard > Mgr, Information Systems & Technology Tel: 603-862-2005 > Office of Sponsored Research Fax: 603-862-3564 > University of New Hampshire > Durham, NH 03824 E-Mail: xxxxxx@unh.edu > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Hampton Roads 2000 - USA ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ What Are These Things We Call Banks? (Part One) <http://www.y2ktimebomb.com/Industry/Banking/doct9808.htm> Member, CPSR Y2k Working Group http://www.cpsr.org/program/y2k/ xxxxxx@pobox.com http://members.visi.net/~certus +1.757.877.4992 *** Member Virginia Peninsula Chamber of Commerce *** --part0_889908419_boundary--
