THQ,Inc. (THQI) Message Board

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Technology Stocks : THQ,Inc. (THQI)

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To: vc21 who wrote (6235)	6/20/1998 11:38:00 PM
From: Sigmund	Read Replies (2) of 14266

Again this is how Radica did it. Not that this approach should be a guide to THQI. "As previously announced, on 30th April 1998 the Company purchased the assets of KidActive, LLC, dba Girl Tech(TM) during the quarter for $2.4 million in cash plus 190,094 shares, a total of $6 million. Of this $4.5 million has been capitalized as intangible assets and will be written off over a three year period commencing in the current quarter. The remaining $1.5 million was written off immediately as acquired research and development." It seems strange to me to write of an asset (acquired company) in the current quarter. This implies the company has no value going forward. I assume that for tax purposes it would not be possible to write off an acquisition that way. For income reporting purposes, I don't know the rules but I would find this very surprising. The company I assume would alert analysts to the treatment they will use, so if Bleeker has discussed this with analysts, he should know what THQI is planning to do.

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