Revisiting "Knowing When to Say When"

by Ram Reddy

My previous Advisor on the perils of capitalizing IT assets (" Know When to Say When: The Difficulty in Discontinuing Failing and Failed IT Projects," 10 July 2002) generated a lot of queries from the media and comments from IT professionals in corporate America; comments such as, "It's high time someone raised this issue," were heard. To give a brief recap: though capitalizing IT expenses is legal under current accounting standards, some corporations have improperly used this practice to hide failing or failed IT projects. My recommendation to corporations is to discontinue such unsalvageable IT projects and give them the correct accounting treatment on income statements.

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Revisiting "Knowing When to Say When" 20 November 2002