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

To: TechMkt who wrote (68780)	10/2/1998 10:50:00 PM
From: Chuzzlewit	Respond to of 176387

Fez, this is a really odd comment: skeptics have wondered whether the deal would've been done if Compaq hadn't been able to write off $3.2 billion of so-called "in-process" technology. Odd, because it makes no difference to cash flow. The difference is only in the amount of goodwill carried on the books. Goodwill is amortized over a period of from 3 to 40 years, whereas the writeoff of in-process technology occurs immediately and is generally ignored by most analysts. You could get the same effect by adding back the amortization of goodwill to earnings. My approach is to focus on "free cash flows" and income taxes paid (rather than the illusory "provision for income taxes"). This accounting change has no affect on cash flow or operational profits or income taxes. Zero. Nada. TTFN, CTC