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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: The Phoenix who wrote (37928)	6/25/2000 1:01:00 PM
From: M. Charles Swope	Read Replies (2) \| Respond to of 77400

Gary, You wrote: "In essesence they [accountants] are saying that intellectual property has no assignable value." But, isn't it the present, pooling method that doesn't assign full value to the intangible property? It lets the acquirer retain the target corporation's cost basis for it's assets despite a purchase price in excess of that cost basis. Changing that to the purchase method of accounting would require the acquiring corporation to put on its books the cost it paid for the target corporation. This increases the asset base of the resulting combination, lowering ROI and increasing the depreciation expenses. So, it looks to me that what eliminating the pooling method would do is REQUIRE the recognition of the full value of intellectual property and goodwill as reflected in the purchase price paid by the acquirer. If I'm right about this (I'm not an accountant), the problem with eliminating pooling is that it makes acquisitions somewhat less attractive, not that it fails to recognize the value of intellectual property. Quite the opposite in fact. Charlie