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Technology Stocks : Corel Corp.
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To: Alomex who wrote (1815)9/4/1997 11:21:00 AM
From: A. Hayer   of 9798
 
US GAAP or CANADIAN GAAP

I don't think Corel ever swithced to US GAAP. I believe they just used the Canadian rules to write-off technology that no longer contributed to Corel's current efforts. Read on:

One option available to Canadian firms doing lots of business in the U.S. is to adopt U.S. accounting standards. JetForm Corp. and Cognos Inc. have done this in recent quarters precisely to be able to write off acquisition costs right away.

But now local firms, led by Newbridge Networks Corp., appear to have come up with another approach that comes close to accomplishing the same thing. It's done so by making its own interpretation of Canadian rules. Earlier this year, Newbridge paid $146.6 million for UB Networks
Inc., a California-based specialist in computer networking.

In the quarter ended April 30, Newbridge decided to write off most
of this amount. Although this is considered unusually quick under
Canadian rules, Newbridge's rationale was that the technology in the industry in which UB Networks operates is moving so quickly that it's no longer appropriate to amortize the purchase over several years.

The one difficulty with this approach, according to accountants, is
that it requires companies to spend a lot of time justifying things to
auditors who may not agree that assets are really worth less than
originally claimed.

This was taken from the link from the following post:

techstocks.com

ah
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