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

To: Mike Van Winkle who wrote (147529)	11/16/1999 8:03:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Mike, The reason is that the Converge Net acquisition is an investment, and the amount expended on the investment should (IMO) be carried on the balance sheet so that investors are able to track how well the investment has done. If you buy stock in a company would you reason that you should take the cost as an expense so your basis is 0, and then claim an infinite rate of return when you sell the stock? In essence, that is what IPR&D write-offs do, and the effect of this is to muddy the financial waters. Converge Net was purchased for its technology, not its physical assets! It was the technology that prompted Dell to buy Converge Net. So why not treat it as an investment, so the results are there for all to see? Note that this has no affect on cash flow or economic profit. It is simply a question of the best way to present the financial health of the company to shareholders. TTFN, CTC