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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 74.38

+0.9%

11:57 AM EST

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To: RetiredNow who wrote (57472)	2/11/2002 2:45:02 PM
From: JeffT	Read Replies (1) of 77400

Hey mindmeld, good point. Also, during the good old days, as I remember it, Cisco was even more aggressive in writing off purchased assets, especially intangible ones. They took huge charges during those earlier acquisitions for "In Process Research & Development". For example for FY 07/00 the charge was 1.373 billion. Back in those days Cisco was bashed for not setting up for amortization such things as goodwill because the argument was it did not match expenses against the future earnings where they belonged. Now the bashing continues for ever setting it up because it is worthless! Bash bash bash - no matter what Cisco does there will be an angle that someone can take to bash them if bashing is their ultimate goal. Below is a quote from a 10-Q filed on 6-13-2000. It is enlightening. People who bash Cisco today for not writing off such things as goodwill, totally fail to praise Cisco for the aggressive expensing of acquisitions they did before the MANDATORY accounting change was made. "The amounts allocated to in-process research and development expense were determined through established valuation techniques in the high-technology communications industry and were expensed upon acquisition because technological feasibility had not been established and no future alternative uses existed. Research and development costs to bring the products from the acquired companies to technological feasibility are not expected to have a material impact on the Company's future results of operations or financial condition. Amounts allocated to goodwill and purchased intangible assets are amortized on a straight-line basis over periods not exceeding five years." The notes actually are more informative sometimes than looking at the financial statements. I just lifted the above quote from the notes, so please go and read all of the notes so that you will understand the context. Thanks for your post mindmeld. Jeff

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