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Technology Stocks : WCOM
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To: Daniel G. DeBusschere who wrote (10811)6/25/2002 8:55:06 PM
From: BWAC  Read Replies (3) of 11568
 
I would say these would be the key words:

"huge amounts of expenses related to building out their telecom system were not being treated as a regular cost but were being capitalized."

Normally you capitalize almost all costs during a build out, until such time as the particular asset produces or is ready to produce income. Seems there is a huge difference in definitions here.

"Mr. Sullivan said that the reason he believed he could capitalize these expenses was because he felt there was no revenue from this, he could capitalize and then treat it as an expense once the business was generating revenue, he would treat it as an expense and run it through the income statement"
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