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Technology Stocks : Broadcom (BRCM)
BRCM 54.670.0%Feb 9 4:00 PM EST
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To: RetiredNow who wrote (4155)8/18/2000 1:34:53 PM
From: Boca_PETE  Read Replies (1) of 6531
 
mindmeld: You have a strong argument in that it would be too aggressive to mark an acquisition's assets to market value, including recording huge goodwill amounts on their balance sheet, only to later have to report huge impairment loss write-offs in the face of market value declines. There's certainly a danger of this happening in techland with some companies stocks selling at 100-200+ PE Ratios, or no PE ratio at all for those that have no earnings.

However, the FASB train is coming down the track. Only the U.S. congress can stop it like they did with the unpopular stock option accounting proposal a few years ago.

As for the FASB itself, I've always believed there are too many academic types influencing the shaping of new accounting rules. You only need to look at their latest "masterpiece", FASB Statement 133 on "Accounting of Derivatives and Hedging". When it comes to implementing this convoluted mess in practice, it's a nightmare and bad joke you would not want to have in your life. Thank you Nick Leison, Orange County, and the other wild eyed trader-speculators who violated their own company's internal controls to cause the few derivative debacles we've had over recent years. Now we've all got to suffer and incur lots of added cost to comply with the new documentation and accounting rules for derivative and hedging that used to be based upon common sense.

This has been an interesting discussion, for sure.

P
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