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Strategies & Market Trends : Value Investing

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To: James Clarke who wrote (5227)11/2/1998 12:53:00 PM
From: Investor2  Read Replies (1) of 78572
 
Apparently SEC is looking at the R&D/goodwill writeoff issue as well.

mercurycenter.com

"Feds looking hard at R&D write-offs ... The Securities and Exchange Commission is clamping down on an accounting technique that's central to the way Silicon Valley companies make acquisitions. ... At issue is the write-off of so-called ''in-process'' research and development expenses. The technique allows acquiring companies to take an upfront charge to their earnings for the value of the target company's technology. Without the charge-off, companies must account for a portion of the acquisition over a longer period of time, a practice that diminishes earnings -- and, importantly, a company's public-market valuation -- for quarters to come."

Best wishes,

I2

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