WCOM Message Board - Msg: 17653303

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Technology Stocks : WCOM

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To: Lizzie Tudor who wrote (10830)	6/25/2002 10:29:59 PM
From: BWAC	of 11568

<What are they saying here, is this actually plant&equipment then?> Yes. Costs incurred during the construction phase, Pre-Revenue generation phase. We all need a bit more information than what is being let out by Management. I have no idea where the term Fraud has crept in. (Thus far). What I can garner is that a large significant difference of opinion EXISTED in the company's guidelines of Capitalizing vs. Expensing Costs. CFO had one opinion, Internal Auditor had another. (Assuming the next steps here...) Internal Audit notified BOD of concerns. BOD conferred with New Auditor KPMG. KPMG agreed with Internal Audit. BOD acted upon recommendations. Now? Prove Fraud. Intentional material act of deception? Vs. error in Accounting judgement? Or error in application of an accounting principle? Information lacking for the investor: What are "Line Cost"? What were the nature of the costs that should have been expensed? Why were these costs ever 'confused' as a capital expense in the first place? What about these costs led the CFO to believe they should be Capitalized?

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