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To: nihil who wrote (21203)	1/27/1999 12:51:00 AM
From: Chuzzlewit	Respond to of 77400

Nihil, I think you're mixing apples and oranges here. Your point about the IRS is true, but I thought the focus of the discussion was the SEC, and here we are talking about a writeoff for future expenses that has nothing to do capitalizing existing R&D. We are talking about the money required to complete R&D that is in process. There are no tax consequences here. It is just a matter of capitalizing the expected expenditure and amortizing them vs. expensing them in one shot. Look at Bill Larson's explanation with regard to NETA, in which he expressly points out there is no effect on cash flow: sjmercury.com CTC