Why this is mistaken
The mistaken model treats continuation as a way to reverse a past sacrifice. But if the payment is unrecoverable under every current alternative, neither continuing nor stopping changes it.
The repair is not to delete history. Put the past amount in a separate reporting and accountability column, then compare only future consequences that differ between alternatives. Ask about recoverable deposits, resale value, contractual exit rights, and new evidence; those may change the classification.
Someone who excludes the amount from the incremental comparison but says it has “no relevance anywhere” has not fully corrected the misconception. The cost can remain relevant to recognition, impairment, audit, governance, litigation, or redesign of future approvals.
When this mistake may appear
- A project has consumed a large budget but future benefits have deteriorated.
- A recorded carrying amount or prior expense is presented beside future alternatives.
Your work may contain this mistake if:
- Says the organization must continue to recover money that cannot be recovered.
- Includes the same past payment in only the stop alternative.
- Treats excluding sunk cost from the decision as erasing it from accounting or accountability.