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Technology Stocks : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: Jerry Asher who wrote (4190)	2/1/1999 11:15:00 AM
From: Mark Brophy	Read Replies (1) \| Respond to of 10309

Re: Big bath accounting Last year, Wind River acquired Objective Software Technology for $6.1m and expensed $4.1m immediately in a one-time "big bath" writeoff. The remaining $2.0m was properly amortized over 3 years. The company also paid $10m to Oracle for network computer code and expensed it all immediately. It would more reasonable for the company to have amortized the costs of both acquisitions over 3 years. The net effect is that pre-tax earnings were understated last year by $9.4m and overstated by $4.7m this year and next year. The one-time write-off was ignored last year because analysts knew it unfairly understated profits, but investors have forgotten about it this year and don't realize earnings are now overstated.