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To: Gator who wrote (2930)	12/3/1998 9:07:00 PM
From: Ruyi	Read Replies (1) \| Respond to of 37507

This will slow down fast tracking Nasdaq listing aspirations. Posted at 10:20 p.m. PST Tuesday, December 1, 1998 Broader R&D probe signaled by SEC BY ADAM LASHINSKY Mercury News Staff Writer The Securities and Exchange Commission has upped the ante in its burgeoning crackdown on the way technology companies account for acquisitions by signaling it will scrutinize much older transactions than the accounting and technology industries previously had expected. The SEC's policy shift comes in the form of comments to a relatively obscure technology concern, Lernout & Hauspie Speech Products N.V. (Nasdaq, LHSPF), a Belgian speech-recognition software company with dual headquarters in Burlington, Mass. Lernout disclosed late Tuesday that it may be required to restate so-called in-process research-and-development charges it took for acquisitions as far back as November 1996. Although Lernout isn't well-known, the impact on Silicon Valley of the SEC's move is potentially devastating. Federal agencies often dictate policy by making examples of individuals or sole companies and then expecting others to follow suit. Any company that has taken an upfront charge to earnings for research-related expenses in the past several years could see those charges challenged and its earnings decrease -- along with its stock price. ''It's an issue that's taken on a life of its own at the SEC,'' says Mike Volpi, vice president for business development at Cisco Systems Inc. (Nasdaq, CSCO), which Volpi estimates has taken acquisition-related charges of at least $1 billion over the last three years. ''We're getting ready and looking back two to three years.''