Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 175.34

+0.1%

10:21 AM EST

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To: 100cfm who wrote (47451)	11/3/1999 9:22:00 AM
From: cfoe	Read Replies (1) of 152472

Sorry if I wasn't clear. John Biddle's response to you about accounting in siliconinvestor.com was accurate and good background for the following. What I was talking about relates to "segment" accounting which QCOM was now doing (it sounded like in response to analysts requests). It means showing each segment of the business - handsets, ASICS, royalties, etc. as if they "stood on their own." That is what I was referring to. Segment accounting is another form of "proforma reporting" that John referred to. The offsetting revenue and expense show up in the related segment. In actuality, even if they "booked" these internal royalties as an expense on one side - they would be booking an offsetting revenue on the other. These offsetting internal transaction then cancel each other out (they call these "eliminating entries" and the accountants and auditors look for these when they do the annual audit). So in summary, there is no voodoo accounting to worry about, no phantom profits. In fact, handset division sale should be accretive next year (after 1st quarter) since I believe they said on the cc that when fully charged (for royalties and ASICS) the handset division lost money this year. Hope this helps and is not too long winded.

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