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To: Berney who wrote (8857)	1/15/2001 10:39:48 AM
From: MonsieurGonzo	Respond to of 11051

TB> "An expected rulling by the F.A.S.B. ... ...will eliminate the need for companies to amortize "goodwill" on their balance sheets. (Barron's 15-JAN pp.MW4~5) This will lift reported profits" affecting companies' reported 2001 earnings; eg.: GE $1.49 --> $1.66 Aetna $1.32 --> $3.64 BRK.A/B $1,035. --> $1,200. PEP $1.77 --> $2.62 RJR $4.67 --> $8.00 Tyco $2.74 --> $2.94, etc. "The idea is that goodwill, typically arising from acquisitions, shouldn't be treated as a wasting asset. Currently, companies take a non-cash charge for goodwill that reduces reported profits. Under the [proposed] plan, companies would be required to periodically evaluate their goodwill to see if the associated asset has been impaired. If impaired, the asset would have to be written down in a single charge." "The big issue is whether these companies will get a lift from the new rules as [P/E-motivated] investors assign the same P/E to the new profits as the old earnings." for example, above earnings restatements have the effect on P/E's as follows: GE 30.1 --> 27.5 Aetna 28.0 --> 10.2 BRK.A/B 64.0 --> 55.2 PEP 20.0 --> 13.2 RJR 10.7 --> 6.3 Tyco 21.6 --> 20.2, etc. -Steve