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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 78.93+0.3%3:09 PM EST

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To: Stock Farmer who wrote (53667)6/15/2001 10:15:42 AM
From: GVTucker  Read Replies (1) of 77400
 
Note that the point is that NT's net income is overstated when compared to CSCO.

CSCO does an acquisition, there's an immediate writedown. NT does not have this writedown; instead, the excess goes on the balance sheet as an asset, and gets written down later. The goodwill depreciation does not compensate for this, as it is amortized over too long a period. Thus, initially, NT net income is overstated when compared to CSCO. Thus, after the goodwill writedown happens, the aggregate net income should be comparable.
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