Accurate Accounting of Project Labor Cost (Capitalization vs. Expensing) on Agile projects and product development continues to be a source of confusion, waste and risk; and remains a blocker to Enterprise Agile Adoption. A myriad of associated risks (impacting Software Development and Dev Ops) include:

-Loss of material benefits of utilizing the an Agile methodology (increasing the cost and risk of software development)

-Blocking large scale and enterprise adoption of Agile and residual benefits

-Creating inconsistencies in interpretation of project cost accounting and defeating FASB’s original intent of generating an accounting standard to protect investor confidence

-Increasing the risk of over-expensing software development costs that should be capitalized

-Increasing the risk of false audit findings and possible mis-reporting of financial statements

-Limiting organizations and industry from fully adopting and leveraging the benefits of an Agile Software Development Methodology

-Possible taxation increases, higher volatility in Profit and Loss (P&L) statements and unnecessary manual tracking of programmer and Dev Op hours

-Inappropriately expensing Dev Ops and possibly causing unnecessary and inappropriate timetracking

-Missed opportunities for innovation and automation

-This workshop offers a practical solution that provides clear guidance to ensure that organizations understand Agile project cost accounting and consistently and appropriately account for corporate investment in software and automation.

We’ll start with a quick review of the problem and define acceptance tests and success metrics consistent with accepted government accounting standards and collectively (or in small working groups) share ideas and design a framework; applying critical thinking tools – (Mental models and Ladders of Inference to increase our understanding of how we think; and challenge mental models to effectively solve problems.

Learning Outcomes from the workshop have potential to be extensible to address related challenges of internal and external audits and remediation of findings; Sarbanes Oxley and General Computer Controls compliance; Regulatory Industry Compliance, etc.