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To: Michael G. Potter who wrote (147541)	11/16/1999 11:14:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Michael, thanks for your detailed explanation. I think the problem that I have with this approach is that from a balance sheet perspective you lose all semblance of the cost of the investment. If you view any investment as a black box designed to generate economic profit, isn't it prudent to list the cost basis of that investment? When you write off IPR&D you lose all sense of the cost. And perhaps,for that matter,it would not be a bad idea to return to the days of capitalizing R&D. As I recall, Michael Murphy suggests a variant of that idea (for analytical purposes) by adding back R&D expenditures to the income statement. Of course, that approach eliminates the cost altogether. It seems to me that too much obfuscation exists in our current accounting models. What we need is transparency and uniformity. My approach is to analyze cash flow from operations and capital expenditures, and compare those numbers to reported earnings. That exercise is quite illuminating, because many of the abusive practices stand out in bold. Thanks again, TTFN, CTC