BUZZ-Telit: capitalization policy finally bites

** Telit's capitalization policy finally catches up with the company after it announces $25 mln of "exceptional" charges

** Writes down $16 mln of capitalized development costs, with $9 mln of cash expenses

** Unlike US peer Sierra Wireless (Toronto: SW.TO - news) , Telit capitalizes a large percentage of its R&D costs, rather than expensing them where they occur

** In FY2016, it capitalized internally generated development expenses of $30.8 mln, against amortisation of $11.6 mln and total gross R&D of $57.4 mln

** If it accounted for its R&D costs like Sierra, Telit would have been loss-making for the last three years, rather than reporting a profit

** Telit has long been one of the most shorted stocks in the UK by hedge funds

** Its shares are down 41 pct this year after it reported an H1 loss and its CEO was found to be a fugitive in a US mortgage fraud case