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To: Ian@SI who wrote (15989)	11/14/1998 7:17:00 PM
From: E_K_S	Read Replies (1) \| Respond to of 25814

It would seem to me that expensing "in process R&D" in the most current quarter would be conservative accounting and the method of choice IMO. The alternative would be to either (1) account for the Symbios R&D as part of Goodwill that must be amortized over several years or (2) expense the Symbios R&D over the product life cycle, again several quarters. Management should take the expense now and show a one time charge against this quarters earnings. Get this thing behind us. Then future earnings will reflect "quality" earnings looking forward. The street would therefore pay a premium for a predictable "quality" stream of positive earnings. I think such an accounting could be looked as a net positive as long as management does not make a habit of taking several quarters of one time charges. What I would focus on is how LSI accounts for the "Goodwill" of the Symbios purchase. If it is expensed over many years then this could eventually be a drag on future earnings. Perhaps somebody could update the thread on how exactly LSI accounted for this transaction. EKS