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

To: Stock Farmer who wrote (58669)	3/26/2002 3:50:14 PM
From: BWAC	Read Replies (1) \| Respond to of 77400

Hey John, On thing about this annual Goodwill Test. Take for example AOL. Book Value including Goodwill is $34. The stock isn't trading at $34, more like $23. The Goodwill they are writing off will get the Book Value down to around $20. So possibly these companies are letting the market decide what the fair value of Goodwill is? I believe this was JDSU's rationale for writing off the second round of their Goodwill. The falling Market cap was still less than the Book Value including Goodwill. Its a good thing to align the balance sheets with current conservative realities. Otherwise the balance sheets are meaningless and some investors can't comprehend them. Its not like AOL or JDSU for example were being given a "full" valuation for thier respective Goodwill anyway.

To: Stock Farmer who wrote (58669)	3/26/2002 4:25:53 PM
From: RetiredNow	Respond to of 77400

OK. Annual instead of quarterly. Two threads of discussion here. One, you said that this is another way to manipulate numbers and I wholeheartedly agree. I like the amortization methods better, except that I would have preferred more realistic timeframes based on what the goodwill is related to. For instance, most of Cisco's goodwill should be written off over 5 years or less, not 20 or 40 years. Then two, what the current standard means for Cisco is that they probably won't have any writedowns anytime soon, since they will be creative in assessing any writedowns. So like I said, goodwill at this point isn't anything to worry about for Cisco shareholders. But back to point one, you do need to worry in the sense that you'd better be making your own assessments about whether an acquisition that generated goodwill is really panning out for Cisco or not.