To: Earlie who wrote (175417 ) 6/27/2002 6:41:38 PM From: Nadine Carroll Read Replies (1) | Respond to Life imitates Earlie Over the past five years, pushing actual operating expenditures off the P&L statement and on to the balance sheet as a capital expenditure, has become a standard slimey practice. Too bad the Worldcom boyz didn't complete "step two" (which should be done as automatically and as regularly as an oil change if you want to keep the old accounting engine running smoothly), which is to take the semi-annual "one-time-only, non-recurring charge". Through this time-honoured process, the balance sheet is purged of all dirty sludge that has been accumulating in the corporate crankcase. Good (accounting) maintenance is important! (g) Mr. Sullivan never attempted to cover up the aggressive accounting method, the person familiar with the matter says. Details are spelled out clearly enough in internal company documents, this person says, that "other people had to see it unless they were blind." Still, Arthur Andersen, WorldCom's auditor at the time, said it wasn't consulted or notified about the capitalized expenses.In May, according to people familiar with his thinking, Mr. Sullivan was contemplating taking a charge. On May 23, the board was notified that a charge would include the line costs, but didn't signal how much it would be, a person familiar with the matter said. online.wsj.com
