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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: slacker711 who wrote (84210)	4/4/2009 2:06:37 PM
From: quartersawyer	2 Recommendations Respond to of 197321

I dont know enough about the in process R&D expense to have a clear opinion on the matter. If it shows up every year, then it seems to me that it is part of the business and should be included as such, but again, there may be something I dont understand about the expense. That's definitely a collective "I don't know enough about" some of the numbers. Part of the problem stems from US accounting standards for R&D. Qualcomm is perpetually involved in "4+"year projects which should be treated as assets as they develop. I think the way it currently works is that Return On Equity becomes being not good compared with, for instance, others in the top ten holdings of QQQQ. But if R&D were capitalized, Return On Assets might be terrible, depending on the eventual performance or writedown of projects. So GAAP vs proforma, as long as either is consistently applied, doesn't matter here except in fairly brittle principle. If businesses proceeded cleanly, like the aftermath of the break on a proper table after cue ball contact, there would be PerfectlyAAP. Pro Forma is for when the General is not so Acceptable, like here. Aside from complexities and nuances (like patent portfolio value) which can't be resolved without analysts and investors digging them out, I believe the problem lies in GAAP's inability to comparatively measure bottom lines of companies with widely disparate levels of R&D "expense". Please correct any misconceptions in this, or in this: stern.nyu.edu