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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (14739)	7/13/2001 9:57:20 AM
From: Boca_PETE	Read Replies (1) \| Respond to of 42834

Kirk: RE:("real accounting tricks in internet companies selling each other advertising and booking it as revenue.") And remember those companies such as Sunbeam under "Chainsaw Al" that accelerated the booking of sales revenues. But I hope you will agree that it's unfair to tar and feather all accountants and company managements as part a mass corporate conspiracy to deceive the public with the transgressions of a few exceptions. There have always been and probably always will be a few companies that do abuse the rules and ultimately pay the price when they are caught, but these companies are the exception. Now there are some accounting rules (ie. Accounting for Stock Options, mergers accounted for as a "pooling" where historical book values of the merged companies are added together to arrive at combined financial statements as if the companies had been merged from day 1, ...) that some analysts and critics periodically and unfairly bash companies on (ie. CISCO). This kind of criticism always amazes me since such companies are merely following the current accounting rules for these issues. We are fortunate in this country to have an independent organization that sets accounting rules - The Financial Accounting Standards Board (FASB) which has representation from industry, public accounting, government, and academia. If rules were set by some government department or bureaucrat as in some countries around the world, they would be subject to political influence. We would have more complex rules that make about as much sense as the internal revenue code (ie. the new "Phase-out of Phase-in of the Phase-out of Itemized Deductions" - not that there's anything wrong with that<grn>). P

To: Kirk © who wrote (14739)	7/13/2001 12:13:26 PM
From: Skeeter Bug	Respond to of 42834

kirk, as i said, i'm not sure msft is a big offender. i'd have to do some research and i'm not paying for the resource ;-) any suggestions would be appreciated. wrt to larg numbers, companies often save up losses over time in order to make the 1 time charge big. this effectively boosts their earnings when they don't report the losses they should. gtw is a master of doing this. perhaps msft did this, at least in part. there are many facets to creatively massaging the numbers. attempting to mislead the masses is something i feel is well above a nothing issue. bob brinker does it and it pisses me off he disrespects people so much. same with various companies. i do know that msft is a HUGE player in the options accounting gimmick that allows companies to compensate employees to the tune of billions of dollars and not running this clear employee expense down the income statement. it is legal, however, i don't believe it is a rational approach. options are an employee expense and should run down the income statement to provide investors with a real picture of employee expenses. eg, if msft paid it's electricity bill in options, would that cost of doing business be excluded from the income statement? absolutely not. i KNOW msft uses the options method to manipulate their numbers. wrt playing the one time gain / one time loss inconsistent reporting, they may or may not be a problem. i KNOW gtw does this and i strongly believe intel does this, too. i can't argue against the net company tricks, however, others are following their lead. csco, for example, is no reporting hypothetical ("pro forma") earnings in their releases now. i KNOW folks should do the due dilly. however, i don't blame a customer of a used car shop for buying a lemon when they were too "dumb" to recognize the car was a lemon. i don't blame someone for being too "dumb" to know bob manipulates his radio topics to get folks who would not otherwise subscribe to send him a fat check. i do blame folks who try and manipulate and mislead, often legally, to get people to do what they otherwise would not do. i think this is a very reasonable approach, although we may disagree.