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To: MeDroogies who wrote (1854)	10/4/2002 9:49:44 AM
From: Oeconomicus	Read Replies (1) \| Respond to of 4345

Advertising, once spent, is gone. Exactly why it should NEVER be capitalized. To do so, in an attempt to reflect the intangible long-term "value" created by it ("brand building"), one is essentially creating "goodwill" on the books to hide expenses. It's complete BS. That said, can you link that article? Sure would like to see what rationalizations they came up with. PS: Capping marketing costs was what got AOL in hot water five or so years ago. Capping other operating expenses is what took down WCOM.

To: MeDroogies who wrote (1854)	10/4/2002 10:16:40 AM
From: The Duke of URL©	Respond to of 4345

From the article: "Microsoft also makes software to enable PDAs to act like phones. That software, Pocket PC, already has a host of manufacturers, including Hewlett-Packard and ViewSonic." Microsoft-powered phone to debut By Margaret Kane Staff Writer, CNET News.com October 4, 2002, 6:54 AM PT Microsoft's wireless phone software will debut later this year in the United Kingdom, a spokesman for mobile services company Orange confirmed Friday. Orange, a division of France Telecom, will launch phones with the software before the end of the year in the U.K. and release them in other European countries in the following few months, said spokesman Stuart Jackson. However, sources close to Microsoft's product strategy said the U.K. debut could come as early as this month. Orange has 12.8 million subscribers in the U.K. and 18.6 million in France. Jackson could not give more information about the product or its pricing but said the new phones would be "very affordable" for U.K. customers, in line with standard cell phone prices. Jackson said the Orange devices will be manufactured by Taiwan-based HTC. Microsoft's Smartphone 2002 software allows wireless phones to run personal digital assistant applications such calendars and contact lists. Microsoft has been trying to get partners for the software and has reached an agreement with AT&T Wireless to produce a phone using the Smartphone 2002 operating system possibly in mid-2003. British manufacturer Sendo International had plans to launch a device featuring the software in Hong Kong. Cell phone-PDA combos have begun to catch on. Both cell phone makers like Kyocera Wireless and handheld manufacturers like Handspring are trying to get into the field. Microsoft also makes software to enable PDAs to act like phones. That software, Pocket PC, already has a host of manufacturers, including Hewlett-Packard and ViewSonic.

To: MeDroogies who wrote (1854)	10/4/2002 10:41:04 AM
From: The Duke of URL©	Respond to of 4345

Of mild news interest from cnet: HP: 'Tis the season for a Pavilion By John G. Spooner Staff Writer, CNET News.com October 4, 2002, 7:32 AM PT Hewlett-Packard is offering CD or DVD burners across the board with its new holiday lineup of Pavilion desktops and notebooks. The company, which is working to establish the Pavilion as its premium PC brand, introduced two new desktop lines, the Pavilion 500 and Pavilion 700, and five new notebooks on Friday. HP's new Pavilion 763n desktop offers a DVD burner for a lower price than the company's previous desktops. The machine will sell for $1,249, without a monitor. It includes a 2.53GHz Intel Pentium 4 processor with 512MB of RAM, an 80GB hard drive and HP's DVD-writer dvd200i DVD+RW format drive. The new 763n also includes IEEE 1394 ports and Nvidia's GeForce4 MX420 graphics board. It will hit stores Oct. 13, HP said. Meanwhile, HP's new Pavilion 753n offers the same 2.53GHz, 512MB of RAM and 80GB hard drive, but with a dual DVD-ROM and a 40X CD-rewritable drive, for $999. It relies on Intel's built-in graphics. The new desktop will arrive at retail on Oct. 6, the company said. HP's new entry-level Pavilion, the 503n, offers a 1.7GHz Intel Celeron chip, 128MB of RAM and a 40GB hard drive, along with a 32X CD-RW drive. Priced at $499, it will arrive in stores on Oct. 13. Meanwhile, HP's new Compaq Presario holiday lineup aims for lower prices, with desktops starting at $399, $100 less than the entry-level Pavilion after rebates. Its new entry-level Compaq Presario 6300US desktop includes a 1.4GHz Celeron processor, 128MB of RAM, a 40GB hard drive and CD-ROM. It will sell for $449 and drop to the $399 price after $50 mail-in rebate. The price does not include a monitor. Notebook mania HP also announced five new Pavilion notebooks, all equipped with CD-RW drives, on Friday. The notebooks will be available in the next two weeks, the company said. HP's new Pavilion ze4115 notebook pairs a 14-inch display with Advanced Micro Devices' mobile Athlon XP 1500+ processor, 256MB of RAM, a 30GB hard drive and a combination DVD/CD-RW drive. It will sell for $1,199, the company said. HP's Pavilion ze4100, is thinner and lighter, but also offers a larger screen. It combines a 15-inch display with a mobile Athlon XP 1600+ processor, 256MB of RAM, 40GB hard drive and DVD/CD-RW combination drive. It will sell for $1,349. An HP Pavilion ze4145 model adds a mobile Athlon XP 1800+ processor and 512MB of RAM for $1,499. Meanwhile, HP also beefed up its Pavilion ze5100 notebook line for consumers who desire high performance, but are willing to live with more weight. One of two new ze5100 models for the holidays, the new Pavilion ze5185, offers a 2.4GHz Pentium 4 desktop chip with a 15-inch display and a combination DVD/CD-RW drive. It will sell for $1,999.

To: MeDroogies who wrote (1854)	10/4/2002 11:01:33 AM
From: The Duke of URL©	Read Replies (2) \| Respond to of 4345

"Typically, spending is capitalized if there are long term benefits associated (capital goods that depreciate over time, but generate income over that period). Advertising does just that." There are some rules that govern whether or not advertising or any expense for that matter, should be capitalized or expensed. One is called the "Clear reflection of Income" Doctrine and has as its gravamen, Sec. 442 of the Internal Revenue Code. I can well see your point that the famous 1984 apple ad campaign should be capitalized and expensed over some part of the revenue stream which came in over the next several years from the mac. These are tough decisions, and they must be made BEFORE the item is booked, and that is hard, and sometimes people make mistakes. Like you said, if the failure of apple to continue to spend eroded the useful life of the original campaign, you would not have known that on day one. The decision might then well have to be made to write off (or expense) whatever is left in the advertising reserve account in that FUTURE year. There are other things also, if the Mac itself had been a flop then the ad reserve for it might have been deducted at that time. "Advertising once spent is gone" That is certainly correct, but remember now we are talking about accrual accounting, cash does not matter. We are trying to figure out how "profit" should look. Instead of being deducted on the income statement that minute, a "reserve" account is set up, this account is an asset, like "prepaid advertizing", but it could have any number of names, and amounts are taking from that account which reduces it, and expensed from time to time. This has the effect of reducing income in FUTURE periods, and increasing income, now. The problem with congress is that they think of accounting as a black or white issue, it is not.