Project Management

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How to capitalize Agile projects?

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Kamal Ibrahim Senior Program Manager| Oracle Calgary, Alberta, Canada
We are in the process to accomplish first release of a first product an agile project
we would like to capitalize this release, and add the other realses to the same capitalized product,
how can we do that?

First, can we capitalize the "release" or we need to wait until we have the entire product on production? ( this might last for 18 months to happen)
and the first release will be put in production this month and uers will start using it already once on production.

Need your thoughts please
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Aaron Porter
Community Champion
IT Director| Blade HQ Payson, UT, United States
If you are capitalizing a project, you are essentially claiming it is an asset. In theory, you can record most/all costs associated with the asset as capital expenses. There are GAAP/IAS/IFRS standards regarding this - have you talked to your accounting department?

A project manager can tell you what has happened on past projects the project manager has worked on, but not how you should do this for yours. My experience has been that projects over a certain dollar amount were capitalized, but I wasn't told what the decision points were; I was just informed that they were capital projects.
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1 reply by Kamal Ibrahim
Sep 26, 2019 1:42 PM
Kamal Ibrahim
...
Thanks Aaron
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Kamal Ibrahim Senior Program Manager| Oracle Calgary, Alberta, Canada
Sep 26, 2019 1:32 PM
Replying to Aaron Porter
...
If you are capitalizing a project, you are essentially claiming it is an asset. In theory, you can record most/all costs associated with the asset as capital expenses. There are GAAP/IAS/IFRS standards regarding this - have you talked to your accounting department?

A project manager can tell you what has happened on past projects the project manager has worked on, but not how you should do this for yours. My experience has been that projects over a certain dollar amount were capitalized, but I wasn't told what the decision points were; I was just informed that they were capital projects.
Thanks Aaron
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Keith Novak Tukwila, Wa, United States
Definitely talk to your finance people. The rules for accounting don't change regardless of whether or not you are using agile. Whether your projects are in an early developmental phase or revenue generating phase for example will impact the color of money.

If you were to equate it to a traditional waterfall project, first release could be proof-of-concept, which is a different color of money than first delivered product with planned enhancements.
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Kiron Bondale Retired | Mentor| Retired Welland, Ontario, Canada
Assuming the preliminary releases are in production, then the development efforts involved with that can be capitalized as can the incremental efforts taking into account the usual distinctions between activities which can (e.g. development) and can't (e.g. project management) be capitalized.

However, this does vary company-to-company so please check with your Finance department as Keith has indicated.

Kiron
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Sergio Luis Conte Helping to create solutions for everyone| Worldwide based Organizations Buenos Aires, Argentina
First of all I agree with people that wrote about asking to finance people on your company. Capitalizing somethig has a great impact on company final results. Second, we try to capitalize each release but it will depends on what each realease is composed and the value each release is delivering.
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Mikel Steadman PMO Leader| Development Dimensions International Troy, Nh, United States
Kamal,

Connect with finance and learn what components have been capitalized in the past.

Development can be capitalized in most organizations.

Mikel

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