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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 73.87

-0.1%

Jan 9 9:30 AM EST

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To: GVTucker who wrote (54787)	9/2/2001 2:14:15 AM
From: Stock Farmer	Read Replies (3) of 77400

Hi GV. Quick question for you re. depreciation and ammortization. Came from another thread where the topic was the impact of the new FASB ruling on writedown of goodwill from acquisitions under purchase accounting. Even before this new rule, Cisco counts all D&A as a pro-forma exclusion. If we accept for the time being that acquisitions are "one time" events I can see excluding the depreciation of goodwill et. al that comes from these activities. However, they have real assets that are depreciating too. Seems to me that by excluding the depreciation of real assets along with the costs of acquisition they are over-stating earnings in their pro-forma accounts! If so, that would be rather "aggressive" accounting, would it not? Of course, by the letter of the law pro-forma is anything they want it to be so the folks who rely on improperly interpreted pro-forma results ... well, they get what they deserve (at least, this would be the position for the defense). My question is "is this realization true?" and if so, "By how much?", and how would we go about figuring out the degree of impact to pro-forma earnings? John.

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