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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: freeus who wrote (138031)	7/29/1999 9:29:00 PM
From: DellFan	Read Replies (1) \| Respond to of 176387

Freeus - you are welcome, of course. I'm not sure what Chuzz's point is. Whether he thinks that income statement recognition should be mandated by the FASB. Or whether he thinks that present disclosure is inadequate. He has the information - courtesy of Dell who provided it in their 10K and annual report. Now what is the bottom line? Should Dell record a 500 million expense every year (with no tax benefit, by the way)? And should they be the only company to do that? Is it fair to Dell or its shareholders to record 500 million expense based on a guessed-at at fair value of the options when the fair value depends on future events which may or may not occur? If so, isn't there a fair value to the stock buyback plan which could also be measured at fair value and recorded as income? And how about the fair value of Dell's patents, real estate and intangible assets (trained workforce, governmental relationships, customer relationships, etc, etc)? Shouldn't they recognize the increase in their values as income? As you can see, "fair value" accounting can get out of hand. The question is where do you draw the line? I've seen it before (in the 70's). It got started, got out of hand and ridiculously expensive for companies to comply. And it was an exercise in futility. The information was not useful and the effort (which was monumental) was abandoned. A true embarrassment to the accounting profession. Now it's coming around again. And the end result will be the same. People will finally back off realizing that the estimates required to produce the information are so imprecise, that the usefulness of the data doesn't nearly justify its cost. And that the data is subject to "estimate manipulation". And that experience with the data shows that it is not reliable, imprecise and so becomes little used. And that fair value accounting, in general, is a bad proposition. Accounting is not, and never was designed to be, a completely comprehensive measurement tool. It is best used to measure historical results at cost. It has its limitations and must be supplemenyed by a host of other data, to get a clear picture of what is going on. Some of that data can be provided as supplemental data in annual reports, but generally belongs outside the "historical cost-based" financial statements. IMHO. Christopher Geez - how do I ever get started on these things! Lighten up buddy!