LIST OF COs. THAT MAY HAVE ABUSED ACQUIRED R&D WRITEOFFS Message Board

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Non-Tech : LIST OF COs. THAT MAY HAVE ABUSED ACQUIRED R&D WRITEOFFS

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To: Robert Douglas who wrote (1)	4/8/1999 1:26:00 PM
From: Paul Berliner	Read Replies (1) of 41

I remember not to long ago that the NETA CEO bragged about how the Company would always exceed estimates because the poolings with the acquired companies yielded what he dubbed 'Honey Pots' - well, now that the books are under scrutiny, he can no longer enact these shennanigans to benefit the financial statements. I have a feeling that NETA is the first in a long line of companies that the SEC will point its finger at. Wall Street is no help either on this issue, because they have encouraged companies to use the pooling-of-interest method in order to yield proforma historical statements that decomplicate the work of making earnings estimates. This is why the purchase method of accounting for acquisitions is not appreciated by the sell-side analyst. As for the growth rate, maybe the companies could appease the SEC with a disclosure of 'results from original ops' and then 'results from acquired companies' (listed seperately). I like how retailers disclose 'same-store sales' (stores opened more than 1 year), which shows the reader if the core business is strong and whether or not the results are benefitting simply from opening additinal units. Paul

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