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We won't know where the line is until we get guidance from the courts. A lot of things in real estate that you might think qualify as just maintenance actually

We won't know where the line is until we get guidance from the courts. A lot of things in real estate that you might think qualify as just maintenance actually have to be depreciated. Like, repairing a roof has to be capitalized since the roof will be around for awhile. The devops equivalent might be migrating from docker swarm to k8s-- the k8s cluster will be around for awhile.

throwaway9980 3y ago
The average roof has a lifespan at least an order of magnitude greater than a k8s cluster. Most roofs being put on today will outlast k8s itself. Software is a liability, not an asset. Treating the construction and maintenance of this horrible liability knows as “code” is a complete misunderstanding of what software actual is.
- jeremyjh 3y ago
  If the software makes money for the business, it is an asset.
  - throwaway9980 3y ago
    That seems like a very broad way of classifying assets. Are people assets? Certainly not on the balance sheet I hope. What about a contract? Is a contract an asset? I’m actually curious, not trying to be a smart ass.
    - cj 3y ago
      A contract for a typical SaaS company, billed annually, is actually a liability (from an accounting perspective) up until the point where the contract has been completely fulfilled. Others (say, an investor) might view a contract as an “asset” because of the future value it might bring, but not in a traditional accounting sense.
    - DelaneyM 3y ago
      The value people produce is an asset. After all, you don't own people, you buy their effort. A contract can be an asset. Usually the unrealized future value of the agreement has value should you need to make a deemed disposition (or have some other valuation event). It gets very obviously complicated and fuzzy though, which is where accountants make the big bucks. It's pretty rare that a company chooses to make a contract valuable, but it often comes up in bankruptcy proceedings. As an example of contracts having value, a few years ago I was involved in the acquisition of some media distribution assets, and one such asset was a transferable "MFN" contract with a major publisher. That was a very, very valuable asset.
      - piperswe 3y ago
        Another instance of contracts having value: bonds and options are just contracts, and it would be insane to consider a bond to not be an asset.
- fdsalkjfdlkj 3y ago
  It's just an example. Another is paint. The rule is close to but not exactly "if it lasts more than a year it has to be depreciated instead of expensed." The book value of the k8s work could be completely expensed as soon as it is replaced. Also, your belief that "software is a liability" is irrelevant. What matters is that tax law calls software an asset (as does most everyone else, even ones who fundamentally understand it).
  - throwaway9980 3y ago
    > Also, your belief … is irrelevant. This is true everywhere and always. I agree with you, lots and lots of software definitely has the properties of an asset. There’s also plenty of software that’s hastily written, untested, and basically not fit for use beyond a short expiration date. More like a jug of milk with a shelf life than a fine grand piano with resale value.
Aperocky 3y ago
> the k8s cluster will be around for awhile. without someone maintaining it, it would probably fail by the end of month. That's not considering the constant changes going into it.

throwaway9980 3y ago

The average roof has a lifespan at least an order of magnitude greater than a k8s cluster. Most roofs being put on today will outlast k8s itself. Software is a liability, not an asset. Treating the construction and maintenance of this horrible liability knows as “code” is a complete misunderstanding of what software actual is.

jeremyjh 3y ago
If the software makes money for the business, it is an asset.
- throwaway9980 3y ago
  That seems like a very broad way of classifying assets. Are people assets? Certainly not on the balance sheet I hope. What about a contract? Is a contract an asset? I’m actually curious, not trying to be a smart ass.
  - cj 3y ago
    A contract for a typical SaaS company, billed annually, is actually a liability (from an accounting perspective) up until the point where the contract has been completely fulfilled. Others (say, an investor) might view a contract as an “asset” because of the future value it might bring, but not in a traditional accounting sense.
  - DelaneyM 3y ago
    The value people produce is an asset. After all, you don't own people, you buy their effort. A contract can be an asset. Usually the unrealized future value of the agreement has value should you need to make a deemed disposition (or have some other valuation event). It gets very obviously complicated and fuzzy though, which is where accountants make the big bucks. It's pretty rare that a company chooses to make a contract valuable, but it often comes up in bankruptcy proceedings. As an example of contracts having value, a few years ago I was involved in the acquisition of some media distribution assets, and one such asset was a transferable "MFN" contract with a major publisher. That was a very, very valuable asset.
    - piperswe 3y ago
      Another instance of contracts having value: bonds and options are just contracts, and it would be insane to consider a bond to not be an asset.
fdsalkjfdlkj 3y ago
It's just an example. Another is paint. The rule is close to but not exactly "if it lasts more than a year it has to be depreciated instead of expensed." The book value of the k8s work could be completely expensed as soon as it is replaced. Also, your belief that "software is a liability" is irrelevant. What matters is that tax law calls software an asset (as does most everyone else, even ones who fundamentally understand it).
- throwaway9980 3y ago
  > Also, your belief … is irrelevant. This is true everywhere and always. I agree with you, lots and lots of software definitely has the properties of an asset. There’s also plenty of software that’s hastily written, untested, and basically not fit for use beyond a short expiration date. More like a jug of milk with a shelf life than a fine grand piano with resale value.

Aperocky 3y ago

> the k8s cluster will be around for awhile. without someone maintaining it, it would probably fail by the end of month. That's not considering the constant changes going into it.