Accounting for Agile Capital with Pat Reed

Agile Alliance Board Member and Agile accounting guru wants to break down the blockers that Finance tends to put up when faced with enterprise Agile adoption. In Pat’s own words, “[We want to] help them understand that Agile is actually more aligned with the original intent of SOP98-1 and ASC 350-40…” Pat says that Agilists tend to want to think of each Sprint as a cycle through design, development, and release, in which case accounting would have to look at the individual hours that was spent on each phase of the cycle. However, thanks to a reinterpretation of the original standards, each Sprint (and all the work performed during it) actually contributes to Agile capitalization.

Human Resources, often times, can be another blocker to enterprise Agile transformations. Performance management can present quite a problem. “…Just like the accounting systems, they block the enterprise adoption of Agile, because they inevitably will reward individual performance over team performance… (where) we are actually rewarded for competing.”


For more on SOP98-1 and ASC 350-40 (the original accounting standards), read this paper.