OT: GAAP, it's not your father's economy any more....
Hi mindmeld,
Re: To be honest with you I think pooling makes a lot of sense in the tech industry where technologies go obsolete in a couple years, but most accountants think purchase method is closer to the truth - whatever the hell truth is. :)
Without a doubt, the FASB's penchant for viewing life in a rear-view mirror is not serving companies or investors well. If it were up to them, we'd still be depreciating ISDN equipment, 4ESSs, and Windows 3.1 installations. Come to think of it, we are. <g>
My view is that the pace of technological change will only accelerate for the foreseeable future, and GAAP, a system that was designed to capture data points in an rapidly vanishing industrial economy, will become increasingly irrelevant and misleading as innovation and service industries come to fore in the future.
I've read the work of sell-side analysts disparaging the pooling-of-interests method and largely, it seems to be sour grapes over companies, best exemplified by CSCO, which are gobbling up promising startups at a furious pace, and are thus depriving the analysts and their underwriter brethern across the corporate (and illusory) Maginot Line of their proper rewards for bringing these bright new jewels out in the debutante ball called the IPO. Is the ending of pooling-of-interest accounting merely a case of jealousy? A case could be made for this argument, IMHO.
Best, Ray |
