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Technology Stocks : Spansion Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Plissken who wrote (3659)	3/31/2008 11:59:48 AM
From: bobs10	Respond to of 4590

you: What's the legal requirement for holdings that size? me: Yeah, there are different reporting requirements based on how much of the stock you own. I posted about it on the AMD board when they spun off SPSN, but I can't remember the details off hand. Seems like about 40% ownership requires you report it as a subsidiary. I'll try to look it up. There are definite FASB reporting requirements depending on what % is owned. Ok, after a quick look up, it looks like with less than 20% ownership the cost method is used; The company would not be able to report its share of earnings, except for the dividends it received from the stock. The asset value of the investment would be reported at the lower of cost or market value on the balance sheet. 21 to 49%(equity method); In most cases, the income statement would include a single-entry line on their income statement reporting their share of earnings. 50% and above(consolidated method) The company would be required to include all of the revenues, expenses, tax liabilities, and profits on the income statement. It would then include an entry that deducted the percentage of the business it didn’t own. me: So it sounds like INTC will have to report a single line item entry. However, I wouldn't put too much stock in that figure. As an example; INTC could be producing flash for Numonyx at below cost or at near cost. Thus making Numonyx look better than it really was.