A while back I wrote a couple of posts (one and two) about attempting to value information as an asset, carried on the balance sheet. I took a very accounting oriented approach, and I think I’ve made some progress. This post follows, after a fashion, those two previous posts.
During my session (here’s a link to the deck) at the 2014 AIIM conference, someone from the middle of the room respectfully disagreed that information is always an asset. My response at the time was that information is always an asset and that you need to set up a contra account to offset any of the negatives that can happen. For example, a contra account for Accounts Receivable would be Allowance for Bad Debts. You can read more about contra accounts here, on Investopedia.
What I should have said was …
When information reaches the stage where it can harm you, let’s say in litigation, you need to create a contingent liability account in order to capture how much (in dollar terms) you anticipate the exposure to be. Now, I’m not an accountant, but from what I can find out an asset cannot be transformed into a liability (please correct me if I’m wrong). However, assets that expose organizations to financial risk, can be accounted for by using contingent liability accounts. You can read more about contingent liabilities on Investopedia.
The other thing I should have said was that organizations need to evaluate the value:risk ratio of their information periodically. It’s absolutely true that certain types of information don’t age well and expose organizations to risk that is greater than the information’s value. At this point an organization needs to determine whether they will dispose of the information (legally) or commit additional resources to mitigating the risk, in whatever manner is most appropriate (doing nothing is not an option).
So, to the gentleman in the middle of the room; Thank you. Your comments forced me to dig a bit and learn something.#governance #ECM #informationmanagement #InformationGovernance #Risk #PHIGs #AIIM #InformationValue #ElectronicRecordsManagement
#information governance #value