diverdave wrote:That will clear the books, and Boeing can start to book larger profits going forward and more importantly justifying larger bonuses for management.
Hasn't that card been played already? ( larger bonuses for larger profits)
Under project accounting rules "profits" are distributed evenly over all items in the block
_and_ they are a "comanded" value.
( in regular accounting you balance real cost against real revenue and a positive remainder is "profit".
in that context an "at the moment" result. In project accounting you project cost, revenue, _expected profits_, ... over the block
and more or less distribute that evenly over all frames moving effectively profits left and outlay to the right into the future. A hidden debt.
When reality diverges from the projection this turns into a ballooning problem.)
IMU coping with runaway cost in scope of project accounting would have required to take the divergence from projections
as a direct loss. But Boeing wrote profits from day one so to speak and just build a larger bow wave of deferred cost.
They also sunk significant amounts of workforce time and money into keeping the terrible teens as tradeable items in the accounting block.
Only the prototypes were finally written off as unsellable.
Time spent on the TTeens would have been better spent on fixing issues in the production process.
But Boeing is slave to its lifestyle here.