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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: rgammon who wrote (17028)	10/8/2001 10:02:33 PM
From: BWAC	Read Replies (1) \| Respond to of 18928

<Does GAAP require us to back out Good Will from EVERYTHING, or do we merely back it out when it is convenient to our current interests? I suspect that GAAP has SPECIFIC instances in which Good Will is to be backed out of reported numbers, and this is NOT one of those instances. > Seems that way sometimes doesn't it? There is certainly a value to some Goodwill. Like in place workforce, fully operating business, company name and reputation, established customer relationships, etc. But Goodwill resulting soley from a balancing entry to reflect the exchange of overvalued stock in a merger is nothing but air on a balance sheet. So you just have to be careful, and think objectively. Some of GX's goodwill has a worth to it, some doesn't. The Frontier Goodwill should have mostly exited when those assets were partially sold. So this is something left over from somewhere I offhand can't place. GAAP doesn't require you to back Goodwill out of anything per say. It just requires you to amortize it over a period of time. Actually even that part is going away and being replaced with some vague monitoring of actual value approach. Which could lead down a path of writing it off in a big chunk, due to the market valuing the Goodwill at zero basically. (ie Book value $4 per share which includes $2 Goodwill, stock price 70 cents per share) I just thought it was important to point out that the ratio to tangible assets might be a better item to focus on. That was the only point. Possibly a more conservative approach.