Posted by: SAS70ExPERT
budget, CFO, Financials, Management, Risk management, SAS 70
What is a fixed asset you say? And what is it’s value today? Don’t know where to start? Call your insurance company….if you don’t have your most precious business assets formally listed or insured, then you need help. From your insurance policy and from your understanding of what are key components that drive your revenue stream, you should be able to get a good idea of how many computers/servers that you have and what is their monetary value.
After asset identification, make sure you determine the replacement cost of your equipment. Recently, in discussions with IT Director at a Fortune 500 Company, he noted that he had made a formal listing of all his information technology equipment. Soon after, he had a flood to occur in his datacenter. Upon contacting his insurance company, he noted that he would only be reimbursed for the depreciated value of his equipment, not the replacement cost. Your $3000 server that you bought today, may only be worth $700 as soon as you walk out of the store when considering the depreciated value. Lesson learned — List your assets, but also understand how much it would truly cost to replace them.
When determining value, monetary terms are not always identifiable. You may have to perform some “ciphering.” Talk to your Company’s CFO or controller, as you may have to understand how the assets are used to generate revenue. From there, determine if the asset value can be calculated by determining a percentage of revenue. Using a financial ratio to determine value can be very subjective, so it is wise to gather several opinions.
As a starting point in a SAS 70 audit, when examining the risk assessment process, the auditor will want to verify that all critical assets have been identified and if you have assigned appropriate values. If you Google the blue book value of your server, or review Craig’s list to determine the price that similar products are selling for, be sure to keep a record so that your auditor may review also. Get your asset list completed today and determine the values, otherwise you may fail to meet your Corporate objectives. SAS70ExPERT@gmail.com.