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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Goutam who wrote (20910)	11/29/2000 8:02:33 AM
From: jeff_boyd___	Read Replies (1) \| Respond to of 275872

"In-Process R&D & Goodwill Tax Treatment" Goutama, Appreciate your analysis of Intel's financials. Its a daunting task. In answer to your questions, the fact that a stock acquisition is made with cash doesn't change the fact that goodwill is not deductible. If they acquired assets, however, the goodwill is deductible. Don't know if Intel has done any acquisitions as pooling transactions; I don't think they have. Pooling avoids the goodwill questions as the assets aren't written up to FMV. I'll have to qualify my in-process R&D question as that isn't something I have dealt with. I'll confirm today, but I'm almost certain that this is similar to goodwill in that they are allocating purchase price to R&D which they are then immediately expensing. The key difference from goodwill is that I believe that they attribute a "fictional" deferred tax liability to go along with R&D. When I say fictional, this means that it is not deductible for tax purposes, but in order to not cause distortions to the tax rate, one has to book this fictional liability. I'm not 100% certain that taxes are attributed to in-process R&D. I'll check into it sometime today. Regards, Jeff