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Technology Stocks : Newbridge Networks
NN 16.11-1.8%Dec 15 3:59 PM EST
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To: zbyslaw owczarczyk who wrote (14444)11/10/1999 10:20:00 PM
From: Doug  Read Replies (1) of 18016
 
Z.O: Under the Purchase method the difference between the current Sale price and the Tax Asset base of the Acquired Company results in "Goodwill". That Goodwill has to be amortized against Income. The period of Amortization can vary from 2 to 40. This indirectly reduces the tax base but it does impact the bottom line.

Some pvt Companies which have sudden Income use the "hidden Pooling method" which really is a Purchase method but a 2 yr accelerated Amortization. This results in them showing little or no Income for Tax purposes.

Trust this helps.
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