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Technology Stocks : THQ,Inc. (THQI) -- Ignore unavailable to you. Want to Upgrade?

To: Jeff Bond who wrote (6230)	6/20/1998 5:59:00 PM
From: Kory	Read Replies (1) \| Respond to of 14266

I'm a bit confused by the speculation on the GameFX acquisition. Has THQ issued any statement about the charge they expect to take? I anticipate they are going to account for it as a purchase. I don't expect a very large charge. In general, only indirect and general expenses related to the acquisition should be expensed in the quarter. Any excess in value given (i.e. THQ stock) over the fair value of GameFX net assets should be recorded as goodwill and amortized over a number of years (often 40). The only way to take a larger charge would be to say that there is no goodwill in GameFX which would seem strange as that would seem to imply that THQ overpaid. The other costs I can see are additional operating expenses of GameFX incurred after THQ acquired them. These are ongoing costs now and shouldn't be part of a "special charge". In general, although there is some leeway in the amount and presentation of the charge, it should not be a matter of THQ "deciding" what they will take for a charge.