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Technology Stocks : Peritus Software Services (PTUS) -- Ignore unavailable to you. Want to Upgrade?

To: Robert Gomez who wrote (1451)	7/13/1998 3:59:00 PM
From: JDN	Read Replies (1) \| Respond to of 1960

Dear robert: GAAP (generally accepted accounting principles) require that for interim financial statements (quarterlies) you estimate the effective tax rate for the year and apply that rate times each quarterly pretax income. When you have to make an adjustment in your estimate then you make that adjustment in the quarter that it become known. Since they had a loss first qtr no tax credit was allowable unless it could be carried back to previous income . I have just forgotten now if that were the case or not. Assuming that there was no carryback available to the company than the loss will go forward and offsett this quarters income if there is income. If the income exceeds the loss available to offsett then they have to estimate the effective rate for the year and use that rate on the remaining income. JDN