Ask Michael Burke Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Knighty Tin who wrote (70445)	11/13/1999 8:34:00 AM
From: Freedom Fighter	Read Replies (1) of 132070

Mike, >>So, my point is, there must be some way to record these costs without either over penalizing or over boosting eps. The cos. have chosen the latter, but they are not indicative of what is happening at these firms.<< I'm still not clear on what I think is appropriate when it comes to R&D and software expenditures. I'm not sure I even understand all the rules completely. Right now companies expense R&D, so if you buy R&D in progress, why not expense that too to be consistent? On the other hand, a lot of R&D and software expenditures really are a form of investment (albeit one with a less certain outcome than most tangible investments) so shouldn't they be capitalized, recorded as assets, and depreciated. By the way, I think it's possible that software assets may explain at least a small part of why stocks in general are trading so far above book value. Every large corporation has in house programmers like myself that are building business specific tools that contribute to profits (cost savings). I believe all of it is expensed because these assets are not for sale and probably couldn't be sold even if you tried. In the grand scheme of things I'm not sure how much that accounts for though. Wayne

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next