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Technology Stocks : Global Crossing - GX (formerly GBLX)
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To: RobertSheldon who wrote (13168)8/5/2001 1:12:33 AM
From: Ally  Read Replies (2) of 15615
 
It is a perpetual struggle to determine what is the correct depreciation or amortization period, and whether an expenditure is capital or expense item. GAAP fails miserably in this area. That's why I look at the cash flow statement as closest to the truth of what is happening... at least the statement has to reconcile back to real cash at end of each period.

However, I fail to see how goodwill would enter in a capacity purchase. It is not like buying a business with a branded product or service that would "enhance" revenue for a period of time in the future due to the brand recognition. Wouldn't capacity leases be like capital leases, and expensed over the period of useful life?
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