Ethical issues in capitalization versus expensing policy. Refer to Example 1 involving the treatment of access costs

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Ethical issues in capitalization versus expensing policy. Refer to Example 1 involving the treatment of access costs by WorldCom.

a. Assume that you were the chief financial officer of WorldCom. What case might you make to your external auditors to justify the capitalization of the access costs in fixed assets?

b. What is GAAP's rationale for the expensing of such costs in the period incurred?

c. Do WorldCom's actions to capitalize these costs pose ethical issues? Explain.

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Somshukla Chakraborty

I have a teaching experience of more than 4 years by now in diverse subjects like History,Geography,Political Science,Sociology,Business Enterprise,Economics,Environmental Management etc.I teach students from classes 9-12 and undergraduate students.I boards I handle are IB,IGCSE, state boards,ICSE, CBSE.I am passionate about teaching.Full satisfaction of the students is my main goal. I have completed my graduation and master's in history from Jadavpur University Kolkata,India in 2012 and I have completed my B.Ed from the same University in 2013. I have taught in a reputed school of Kolkata (subjects-History,Geography,Civics,Political Science) from 2014-2016.I worked as a guest lecturer of history in a college of Kolkata for 2 years teaching students of 1st ,2nd and 3rd year. I taught Ancient and Modern Indian history there.I have taught in another school in Mohali,Punjab teaching students from classes 9-12.Presently I am working as an online tutor with concept tutors,Bangalore,India(Carve Niche Pvt.Ltd.) for the last 1year and also have been appointed as an online history tutor by Course Hero(California,U.S) and Vidyalai.com(Chennai,India).

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