Cisco Systems, Inc. (CSCO) Message Board

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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 73.94

-1.1%

3:59 PM EST

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To: Stock Farmer who wrote (58669)	3/26/2002 3:50:14 PM
From: BWAC	Read Replies (1) of 77400

Hey John, On thing about this annual Goodwill Test. Take for example AOL. Book Value including Goodwill is $34. The stock isn't trading at $34, more like $23. The Goodwill they are writing off will get the Book Value down to around $20. So possibly these companies are letting the market decide what the fair value of Goodwill is? I believe this was JDSU's rationale for writing off the second round of their Goodwill. The falling Market cap was still less than the Book Value including Goodwill. Its a good thing to align the balance sheets with current conservative realities. Otherwise the balance sheets are meaningless and some investors can't comprehend them. Its not like AOL or JDSU for example were being given a "full" valuation for thier respective Goodwill anyway.

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