While power and cooling assets are frequently purchased at the request of an IT professional or a facilities manager, often the “life of the new asset” fails to get linked to a business, institution, or organization’s practices for the “booking of assets”, despite having individuals who are well versed in accounting principles and tax issues. Without direct guidance, the assets generally get booked to the realty or placed as a leasehold improvement, which is the traditional way to book and depreciate power and cooling infrastructure. This may be a costly mistake.
Modular factory built solutions in the hands of a resourceful alliance of IT, facilities, and financial personnel can make a substantial impact on data center reliability and a welcome contribution to the asset management and tax efficiency of their business, organization or institution. The booking of assets is usually a one-time opportunity to plan the financial and accounting future of newly acquired equipment. Accurate assessment of the life of power and cooling equipment reduces the chance of expensive “write-downs” later.
Whether practiced by asset managers, IT professionals, or facility managers, asset management practices used by many businesses were developed and documented many years before the advent of modular, scalable factory-built UPS systems, PDUs and related equipment. During that period of time, all power and cooling equipment was considered as “fixed in place” or “building equipment”. The “fixed in place” designation limits the equipment to treatment as building improvement in the case of owned property, and a leasehold improvement in the case of a rental. In either case the opportunity is missed, to account for UPS systems, PDUs and related equipment as “business equipment” that is managed as personal property.
Modular, scalable, factory-built solutions provide for “asset reuse and portability”. This provides IT professionals and facility managers the ability to deploy and redeploy infrastructure in response to changes in business or upon the conclusion of a lease, reducing the cost of abandonment in place, or the necessity to write down a “stranded asset”, or cause the asset to inure to a landlord as a leasehold improvement. This benefit is realized by facility managers or asset managers who develop “rent-rates”, benchmark their facilities against the facilities of other companies, and plan capital improvement. IT departments receive the direct benefit, because real estate taxes and depreciation are a large part of rents applied to IT space, collectively only second to energy costs.
