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

To: GVTucker who wrote (53668)	6/15/2001 10:25:04 AM
From: Stock Farmer	Read Replies (2) \| Respond to of 77400

Hi GV - I know you're right, but I still don't understand (Please have patience, I'm trying to learn) Let's take this a step at a time CSCO does an acquisition, there's an immediate writedown. Where does this writedown show up? Is it on the income statement? NT does not have this writedown; instead, the excess goes on the balance sheet as an asset, and gets written down later. The goodwill depreciation does not compensate for this, as it is amortized over too long a period. I get this part. That's the "goodwill" that gets added to the balance sheet. If I put this and previous statement together, I see that CSCO has an immediate writedown of the ASSET (no goodwill shows up on the balance sheet), but no effect on INCOME. This is what has me really confused. Are you measuring income as appreciation of equity? I hope the thread doesn't mind my tuition here... John