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Technology Stocks : Network Associates (NET) -- Ignore unavailable to you. Want to Upgrade?

To: Edwarda who wrote (4533)	3/27/1999 4:13:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 6021

Edwarda, it is my understanding that the avowed purpose of the charge is to recognize the expected future expenses designed to complete the development of uncompleted R&D projects, and is much like a reorganization expense. Am I incorrect in this supposition? How else could this one-time charge decrease future expenses under an accrual system. Under accrual accounting rules, R&D is expensed, not capitalized. So when companies combine under pooling all of the R&D has already been expensed. Have I been laboring under a misapprehension? It is also my understanding that under purchase accounting rules, the value of the acquired company is carried on the books at net asset value (subject to market conditions via audit), and that the difference between the purchase price and the NAV is carried on the balance sheet as goodwill and amortized over an appropriate number of years. I understand that FORE has attempted to write off the future costs of in-process R&D on products that were already marketed -- a pretty neat trick (dare I call it FOREplay). It seems to me that such gambits are really attempts to fool shareholders. Sounds like they hired Bloom, the accountant in The Producers. TTFN, CTC