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Guest: Dr. Hank Alewine; Topics: Accounting issues for public and commercial space activities including risk, investing, costing, timelines, delays, asset valuation, determining what a space asset is and much more.
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We welcomed Dr. Hank Alewine of the accounting department at the University of Alabama Huntsville to the show to discuss the accounting challenges for both public and commercial space. I suggest you follow the tags which I have repeated below as they summarize most of the topics and challenges discussed during this interview. For your convenience, I have copied the tags below.
Tags: Dr Hank Alewine, University of Alabama @ Huntsville, accounting for space activities, commercial space challenges, space commerce characteristics, terrestrial accounting compared to space accounting, space asset valuation, accounting for large distances, accounting for gravity issues, inhospitable environments and accounting, information availability, in-space manufacturing, space solar power in-space assets, sunlight as an asset, space treaty requirements, time delays for accounting, Earth and space resource degradation accounting issues, consolidation accounting, accounting for sustainability, accounting for scarce space resources, ten years is a near term challenge, costing space missions and work, humans in space and accounting, risk models for space, variable values and audit challenges, Artemis and OMB reports are concerns, Artemis and mission costing, space investing models, buyer risk, investor risk.
While you may think accounting might be a boring subject, especially with space, think again. Dr. Alewine was a superb guest and brought the topic to life as we went over accounting challenge after accounting challenge. For example, when the subject of valuing an asset came up, he was asked about space solar power. You might find what he had to say about claiming sunlight as an asset and putting a value on it to be most interesting. Also, repairs and maintenance in space on in-space hardware has challenges such as depreciating them as you do minerals and other hard assets here on Earth. Depreciating solar panels or the components making up SSP is an unknown. What is the life expectancy? How do you cost the R&D costs then the replacement costs? Are terrestrial guidelines used such as those for real estate? Another challenge was coming up with a value to put on a balance sheet for space-based assets plus how one might describe the space-based assets.
We talked about providing clean and/or audited financial statements for a company operating in space with multiple types of assets including hard assets from Earth plus space assets. How does one determine these values? Will we see certified or expert space asset appraisers someday to help us navigate these unknowns and challenges? Early in the program, our guest outlined four unique factors that make space a different asset medium for accounting over the terrestrial environment. I suggest you listen to what he said, post your comments on the four factors on our blog and maybe have some ongoing discussions on these differences. Hank responded to calls and listener emails posing good questions and challenges, so I hope you find this a rewarding program and interview. I certainly did.
As we were coming up on the end of the show. Tony from Pasadena asked our guest about his having concerns on the viability of Artemis as an accountant and financial person given the recent OMB release of the giant cost overruns for Artemis given our overall economic condition. Don't miss his reply but for a hint, he said he had concerns. He said the concerns will probably get louder suggesting Artemis as an example of the costing challenges that he talked about during this program.
Please post your comments and questions for our guest on the blog for this show. You can reach Dr. Alewine through The Space Show or his faculty page at the University of Alabama Huntsville campus.