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Technology Stocks : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: trust fund pirate who wrote (8597)	10/7/1998 12:47:00 PM
From: Reginald Middleton	Read Replies (1) \| Respond to of 19080

The terms "material" and "market value" are really up to the management of the company in interpreting. Unlike many companies in the financial sector, most assets carried by a software company are not valued in an open market and/or cannot be readily marked to market. Take, for instance, the example I gave concerning the code to Oracle 8i. What value is ORCL currently carrying this code on the books as? My opinion??? Basically whatever management deems fair (and of course appropriate at the time of sale if there ever was a sale). Suppose that what they sold was the code of a small, unknown project, what is the value of that property? The problem with this situation is that many of the assets of knowledge-based companies are not explicitly placed on a balance sheet, yet are instead lumped together in a sectionof goodwill. Of course you could try and back into it using development costs etc. but that too is highly contingent upon management's opinion. What you indicated holds true more so in the sale of securities or real estate. Not to say that your statement was not true, but mgmt. has the leeway to play games with accounting definitions when it comes down to assets of an intellectual nature that were not actually valued by a liquid market. Just my .02 cents.