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To: Investor2 who wrote (10081)	11/24/1999 2:25:00 PM
From: Boca_PETE	Respond to of 15132

I2: re: < IBM and disclosures of special one-time items > I don't follow IBM's press releases and annual report disclosures, but I do follow major oil industry companies. The whole practice of disclosing special one-time items has developed out of demands from the analyst community, not from mandated FASB and SEC disclosure rules. In analyzing press releases each quarter, I've noticed that companies vary in their interpretation of just what special items are. MOBIL treats normal recurring LIFO inventory adjustments as "special items" whereas all the other majors don't. PHILLIPS had treated currency exchange effects as a "special item" whereas the rest of the majors don't. EXXON is so large and must have many of the types of special items the other majors od, but they rarely disclose special items (maybe they decide such items are "immaterial" and should not be disclosed). Then there's period-to-period inconsistencies by some companies in identifying special items. During 1999 fourth quarter, CHEVRON treated a major CALTEX inventory write-down to market value as a special item (as did all the other major oil companies). However during 1999 first quarter when prices rose and most oil majors recorded special credits to reverse such 1998 fourth quarter write-downs, CHEVRON did not. In other words, this area of special item disclosure is up to company management interpretation. Some companies are more cooperative than others and seek to satisfy analyst needs in this area - others are less forthcoming. I'd imagine this situation is not confined to the oil industry. FASB and SEC rules do mandate disclosure of certain one-time items as "Extraordinary Items" such as "Losses on discontinued operations" and "cummulative effects from changes in accounting principles". P

To: Investor2 who wrote (10081)	11/30/1999 9:46:00 AM
From: Boca_PETE	Read Replies (1) \| Respond to of 15132

I2: re: <IBM Reporting of One-Time Gains> Having read the WSJ Nov 24 article, I would add the following to my Novemeber 24 comments posted here: 1.) SEC Senior Fellow, Paul Kepple is quoted in the WSJ article asserting that SEC regs require reporting of One-Time Gains on the sale of operating assets as "NON-OPERATING INCOME" (not as part of "OPERATING INCOME"). I believe he is incorrect and would challenge his to show us the specific reg he refers to. My sources say that it was the SEC that insisted on classifying such one-time gains/losses on the sale of assets as "OPERATING INCOME" some years back. What is a "Senior Fellow" anyone ? Could be an old chap hanging around the water fountain. A more credible source would have been the current SEC Chief Accountant. 2.) I'd agree that IBM's netting of material asset write-offs and gains on sales of assets in SG&A EXPENSE is misleading and is poor financial reporting, despite fine print disclosures of impacts. It would have been more appropriate to show material write-offs as a separate line item under "OPERATING EXPENSES" and to show the one-times gains on asset sales either as part of "OTHER INCOME - OPERATING" or as a separate line item under "OPERATING INCOME" (Afterall, GAINS ARE INCOME aren't they?). However, IMHO, I believe that IBM did follow whatever foggy rules are out there - they just don't seem motivated to serve their customers in this case - the analyst community. Maybe as a result of the controversy, more specific rules will be forthcoming on the reporting of "Special One-times Items". P