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

To: RetiredNow who wrote (57310)	2/7/2002 7:23:23 PM
From: BWAC	Read Replies (2) \| Respond to of 77400

Why don't you all just do a Goodwill-Less Balance Sheet and eliminate the whole issue? Very simple. Take the Goodwill Asset and make it zero. Drop down to the Stockholders Equity section and reduce it by a corresponding amount. Bingo. Goodwill is gone. That is the net effect of eliminating all Goodwill. Now? Was the Balance Sheet materially changed? Or were some numbers just adjusted? BTW The Goodwill reached the Stockholders Equity section in much the same way. CSCO paid XXX for net assets of a company which only totalled XX leaving X as Goodwill. Add all the net assets to CSCO books, Add Goodwill amount, Increase StockHolders Equity by XXX.

To: RetiredNow who wrote (57310)	2/7/2002 7:44:13 PM
From: Stock Farmer	Read Replies (1) \| Respond to of 77400

On goodwill. From Cisco 10-K: GOODWILL AND PURCHASED INTANGIBLE ASSETS Goodwill and purchased intangible assets are carried at cost less accumulated amortization. Amortization is computed using the straight-line method over the economic lives of the respective assets, generally three to five years. Then you wrote So barring impairment, the quarterly amortization is just a rote calculation. Yes precisely. Barring impairment, a 5 year depreciation of 3 Billion in goodwill would be about 150 million per quarter by this nice rote calculation. Impairment generally results in an accelerated depreciation (e.g. bigger number). Care to postulate an impairment that would reduce the charge? A negative impairment? Hmmm... SFAS 142 requires goodwill to be tested for impairment and written off when impaired, rather than being amortized as previous standards required. A blessing for financial engineers. Anyway, the point here is that Cisco is carrying a pile of goodwill and not writing it off. Not to the same degree as her competitors. Even proportionately speaking. Anyway, they used to write off goodwill at the rate of 150 M$/quarter. Now 0. And it's goofy to think that "goodwill" will last forever. So the facts on their face suggest that Cisco chose to carry a pending writedown of goodwill into the future about 1/4 the size of its earnings. Not a "conspiracy", but a conscious decision with future implications... Tick tick tick... On options, yah... it's murky here. We'll know only the number of shares at the close of the quarter. We'll need to wait until the 10-K comes out to see how options, acquisitions & repurchase factored into the numbers. I've always thought something so important to their business strategy should be disclosed, but it's not like co's to file anything more than they have to. I don't think anywhere near 2Bil, just that's the benefit I estimate if 100% of the vested options less in the 8&under pot are exercised. Probably more like a few hundred mil at most. Large compared to E, small compared to prior quarters.