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Biotech / Medical : Munch-a-Biotech Today
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To: LLCF who wrote (508)7/29/1999 11:01:00 AM
From: Biomaven  Read Replies (1) of 3158
 
David,

No, this isn't the pooling decision. Rather it is the issue of whether to allow immediate write-offs of R&D in purchase (not pooling) accounting. FASB was going to kill it until it was pointed out that you would then have two different accounting systems going at once in the same company - amortizing stuff you are developing that was originally purchased, while still having an immediate write-down of internal projects.

The SEC of course has been trying to crack down on excessive write-offs of in-process R&D. One response I have noticed is that companies who have been forced to amortize substantial amounts now present two sets of accounts - "we made a profit of $0.20 per share, or $0.15 after accounting for amortization of acquisitions."

Peter
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