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

To: Petz who wrote (23052)	12/20/2000 6:12:12 PM
From: jeff_boyd___	Respond to of 275872

"Valuation of Inventory" Lower of cost or market is the method most companies follow. Usually this means cost unless the inventory has been sitting around for a long period of time. Determining cost can be quite a job due to determining what costs need to be absorbed and companies do sometimes play games. The variable costs are pretty straightforward, depreciation on plants is straightforward, but what about costs like purchasing or how the overhead pool is allocated to inventory. Sometimes companies will change items like this and if they don't cross a certain size threshold they don't have to be disclosed as an accounting method change. I've always been impressed with Intel's ability to forecast gross margins. Given the variability of pricing and the number of units produced they do an amazing job. I doubt they are being too aggressive in minipulating methods, however, as there are other easier methods of managing income. Regards, Jeff