You would think that your code would work. However, SQL Server does not guarantee that the WHERE clause filters the database before the conversion for the SELECT takes place. In my opinion this is a bug. In Microsoft's opinion, this is an optimization feature.
Hence, your WHERE is not guaranteed to work. Even using a CTE doesn't fix the problem.
The best solution is TRY_CONVERT() available in SQL Server 2012+:
SELECT AVG(TRY_CONVERT(DECIMAL(18,2), Reimbursement)) AS Amount
FROM Database
WHERE ISNUMERIC(Reimbursement) = 1 AND Reimbursement IS NOT NULL;
In earlier versions, you can use CASE. The CASE does guarantee the sequential ordering of the clauses, so:
SELECT AVG(CASE WHEN ISNUMERIC(Reimbursement) = 1 AND Reimbursement IS NOT NULL
THEN CONVERT(DECIMAL(18,2), Reimbursement))
END)
FROM Database;
Because AVG() ignores NULL values, the WHERE is not necessary, but you can include it if you like.
Finally, you could simplify your code by using a computed column:
alter database add Reimbursement_Value as
(CASE WHEN ISNUMERIC(Reimbursement) = 1 AND Reimbursement IS NOT NULL
THEN CONVERT(DECIMAL(18,2), Reimbursement))
END);
Then you could write the code as:
select avg(Reimbursement_Value)
from database
where Reimbursement_Value is not null;