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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 231.69

+1.7%

Dec 10 3:59 PM EST

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To: Mark Fowler who wrote (59784)	6/5/1999 12:30:00 PM
From: -	Read Replies (2) of 164684

Glenn, Referring to your second link (the FASB ruling) if you look at this carefully, you can see it shows that the claims in the Barron's article, about Amazon using unusual accounting practices, is completely false. They should have known better! As is widely known and discussed in the high-tech business community, the majority of high tech companies that acquire today are using the "pooling of interests" method accounting for acquisitions - e.g. Cisco and Lucent; it cuts across the networking and computing industry. It allows them to treat the "goodwill" part of the valuation, in a way that is favorable to reported earnings. The FASB accounting rulemakers want to change the way the "goodwill" premium is written off. This will mean that when a company does an acquisition, it takes a much bigger hit to reported earnings. The venture community and high-tech business community is in an uproar fighting it, but the accounting rule changes will probably happen anyway. One of the effects that it is having, is causing a "wave" of acquisitions to happen now, because the acquiring companies are trying to beat the deadline before the new rules kick in, about a year from now. -Steve

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