3Com Corporation (COMS) Message Board

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Technology Stocks : 3Com Corporation (COMS)

COMS 0.00130

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Nov 7 11:47 AM EST

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To: TFF who wrote (14265)	3/5/1998 11:31:00 PM
From: David Lawrence	Read Replies (1) of 45548

>>lower cost=higher earnings=good news Maybe, maybe not. The cost will either have to be capitalized and amortized over many years (probably minimal impact on future EPS) and/or it will have to be taken as operating expense versus non-recurring merger expense. If it is taken in past quarters as ordinary operating expense, it will make future comparatives more favorable (good). If it is taken in future periods, it will make year-vs-year comparatives more difficult (bad). The SEC's requiring the changes is not a big deal. All big corporations use restructuring charges, and there is nothing wrong with being aggressive when it comes to reducing the tax bill. I'm sure it was far more complicated than most of us can comprehend, with all of the goodwill and such from USR's prior acquisitions. Remember, put the same problem and circumstances in front of 20 different accountants, and you'll probably get 20 different opinions and results.

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