>>Their prior accounting practice of not immediatley charging marketing off as an expense was the oddest concept I have ever seen.
Actually, not all that uncommon. Most companies are required to capitalize some of their costs and not take the expense charge until the corresponding revenue is recognized. However, in this case, the amortization period that AOL was using was not, ah, commensurate with their high customer turnover rate, to say the least.
These big companies just love to set up scenarios where they can take a big charge, so they have an occasional opportunity to throw in the kitchen sink. It certainly muddies the water, but we have to live with it. That's one of the reasons that I like Value Line. They exclude non-recurring income and loss items from earnings history and projections, giving a clearer picture of the company's true operating performance. But, I digress... <g> |
