Re: Resolution? #787 terminology - in particular "ISOC Standards Pillar"

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Broadly I trust ISOC to do what is right and want a form of words that
will keep me informed as to how we are doing financially.  I endorse
Harald's change from IETF to IASA but jibbed at general ledger as having
a technical meaning that to me was too limited.  Going back to sccounts,
as Carl suggested, I am happy with.

If we say profit and loss, then two caveats.  A minor one, again from
the terminology of accountancy, is that some enitities are regarded as
not having profit and loss account but something similar with another
name eg income and expenditure.  I am uncertain what accounts a cost
center has in ISOC; if it has a profit and loss account, then no
problem.

But a bigger issue is that the profit and loss account is only half or a
third of the story.  There must be a balance sheet with it especially as
we talk of building a reserve, be it of whatever sum and built over
whatever timescale.  Only a balance sheet will measure progress against
this objective.  So if you include the term profit and loss, you should
include balance sheet as well.

The other part is cash flow.  Many a business with a healthy profit and
loss account and a healthy balance sheet has ceased trading because it
ran out of cash; it could not pay its bills.  This was the fate of many
dot coms.  It might be ours since we appear not to balance our books
directly and depend on donations coming to balance our books; delayed
donations equals insolvency.  So cash flow is a nice to have.

Or as Carl said we stay with (IASA) accounts and trust ISOC to produce
what is right.

Tom Petch
----- Original Message -----
From: "Margaret Wasserman" <margaret@xxxxxxxxxxxxxx>
To: "Carl Malamud" <carl@xxxxxxxxx>; "Tom Petch"
<nwnetworks@xxxxxxxxxxxxxx>
Cc: "Harald Tveit Alvestrand" <harald@xxxxxxxxxxxxx>; <ietf@xxxxxxxx>
Sent: Friday, January 21, 2005 3:20 PM
Subject: Re: Resolution? #787 terminology - in particular "ISOC
Standards Pillar"


>
> I generally agree with Tom and Carl.
>
> The community needs visibility in to the IASA finances, sufficient to
> ensure that the IETF's money is spent on IETF-related activities with
> a reasonable level of prudence.  I don't think that our BCP needs to
> specify a reporting methodology that the IAD/IAOC should use to
> provide that visibility...
>
> Today, we are looking at organizing the IASA as a cost center within
> ISOC, and it seems likely that the visibility that the IETF needs can
> be provided in the form of a P&L statement for the costs center and a
> summary of its general ledger accounts.  That's fine, but do we need
> to say it here?
>
> There is a section of the BCP that says:
>
>     Within the constraints outlined above, all other details of how to
>     structure this activity within ISOC (whether as a cost center, a
>     department, or a formal subsidiary) shall be determined by ISOC in
>     consultation with the IAOC.
>
> It seems inconsistent with this section to mandate elsewhere that the
> IASA will be organized as a cost center, that we will use "cost
> center accounting", that the financial reports will include a P&L for
> the cost center, that we will publish the general ledger accounts,
> etc.  These are details that, IMO, the IAOC and ISOC should work out
> (and change as needed to meet the needs of IASA and the IETF
> community) between themselves.
>
> Margaret
>
>
> At 11:43 AM -0800 1/20/05, Carl Malamud wrote:
> >Hi -
> >
> >I agree with Tom that this is kind of confused, and I think there is
some
> >potential fast and loose use of the language of accountancy.  :))
> >
> >I think the vague term "accounts" is just fine for the purpose we are
> >engaged in.  I think all we're trying to say is that the ietf
community
> >would like to see a periodic summary of the IASA accounts in the form
of
> >standard financial statements that reflect the income, expenses,
assets, and
> >liabilities of that cost center.  I don't think we need to get into
> >general ledgers and all that other technical accounting talk.
> >
> >Carl
> >
> >>  Inline,
> >>  Tom Petch
> >>  ----- Original Message -----
> >>  From: "Harald Tveit Alvestrand" <harald@xxxxxxxxxxxxx>
> >>  To: <ietf@xxxxxxxx>
> >>  Sent: Wednesday, January 19, 2005 3:24 PM
> >>  Subject: Resolution? #787 terminology - in particular "ISOC
Standards
> >>  Pillar"
> >>  > In #787, Margaret raised a couple of terminology questions
related to
> >>  the
> >>  > terms:
> >>  > - IASA Accounts
> >>  > - IETF accounts
> >>  > - ISOC Standards pillar
> >>  > In discussion, it seems clear that "IETF accounts" is a mistake,
and
> >>  should
> >>  > be changed to "IASA accounts" wherever it occurs.
> >>  >
> >>  > "IASA accounts" should probably be changed to "IASA general
ledger
> >>  > accounts" - to have a recognizable term from bookkeeping instead
of
> >>  the
> >>  > rather vague term "accounts".
> >>  >
> >>  general ledger is indeed a recognizable term from bookkeeping but
it is
> >>  not the one I would want to see.  Accountancy (as taught to me)
divides
> >>  up the ledger into accounts, and yes, acccounts is also a
recognizable
> >>  term.  The ledger is typically divided up into (traditionally
physical
> >>  separate books)
> >>   - purchases/creditors ledger
> >>   - sales/debtors ledger
> >>   - general/impersonal ledger
> >>   - private ledger
> >>  so seeing only the general ledger gives me an incomplete, perhaps
> >>  misleading view of the financial state of an organisation.  In
fact, I
> >>  would want to see the private ledger first since it contains
profit and
> >>  loss, trading, drawings etc.
> >>
> >>  More generally, I would want to see the IASA accounts (an
accountancy
> >>  technical term) in the ledger (another accountancy technical
term).
> >>
> >>  Or do these terms change meaning as they go west across the
Atlantic?
> >>  <snip>


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