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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Cynic 2005 who wrote (71929)	12/15/1999 10:51:00 AM
From: Mike M2	Read Replies (2) \| Respond to of 132070

Mohan, once the tech companies scream enough at their accountants they will convince FASB to delay ruling on it much like they did for the employee stock options accounting and revenue swapping. Just let us fool the public a little longer then we will clean up our books. just my cynical opinion. mike

To: Cynic 2005 who wrote (71929)	12/15/1999 12:30:00 PM
From: Chuzzlewit	Respond to of 132070

Mohan, Yes, I recall that. There are major problems with accounting, not only with pooling of interests, but also with the purchase method. I have said over and over again that "earnings" are fictions created by accountants, and that's why I scream to anybody who will listen to ignore earnings and focus on the statement of cash flows. If CSCO is forced to restate earnings it will not result in any change in cash flow (although it might provide a dose of reality to the market). What I simply don't understand is why anybody would pay so much for so little cash flow even assuming the rosiest of growth predictions (on a cash flow per share basis). Speaking of cash flow analysis, I suspect an interesting bit of sleight of hand by LU may be forthcoming. They had an old receivable of $500MM which they are securitizing in the expectation of syndicating the note. They have yet to publish their Q3 10-Q (so what I say is conjecture), but based on what their CFO said, I suspect that they consider the conversion of the receivable to a note constitutes an investing activity. If that proves to be the case then they will have overstated their operating cash flow for the quarter by $500MM. The reason I bring this up is that I wonder how many companies use this technique to hide the fact that receivables aren't coming in as quickly as their financial statements would have us believe. How much of those investments in short-term securities are really financing contracts? TTFN, CTC