@Dollarsandcents You misinterpret what I used to be saying. The “outdated accounting” to which I used to be referring was the traditional historical past necessary discount of the goodwill asset worth to zero by amortization over a interval of years, earlier write down if the lack of worth turns into evident earlier.
Present accounting requires impairment recognition solely when the lack of worth is catastrophic ( the 5.8 billion greenback VZ occasion ,e.g. ); it’s not an annual mark to market. Within the meantime it’s carried on the authentic booked worth.
Like tax provisions in GAAP, the precise guidelines for impairment testing are complicated, however the result’s occasional monumental one time costs such because the VZ and up to date BTI impairment cost.
Regularly the precision of absolutely audited GAAP statements will not be essentially an excellent measure of an organization’s precise monetary place or earnings and firm to firm comparative monetary statistics based mostly on GAAP statements, even in the identical trade, will be very deceptive.
This explains the prevalence of reporting so-called non GAAP numbers and valuation based mostly thereon, however these changes can be questionable.
GAAP, regardless of the precision of the arithmetic, with all of the required estimation and guidelines is a really inexact science ( higher time period maybe artwork ).
Present accounting requires impairment recognition solely when the lack of worth is catastrophic ( the 5.8 billion greenback VZ occasion ,e.g. ); it’s not an annual mark to market. Within the meantime it’s carried on the authentic booked worth.
Like tax provisions in GAAP, the precise guidelines for impairment testing are complicated, however the result’s occasional monumental one time costs such because the VZ and up to date BTI impairment cost.
Regularly the precision of absolutely audited GAAP statements will not be essentially an excellent measure of an organization’s precise monetary place or earnings and firm to firm comparative monetary statistics based mostly on GAAP statements, even in the identical trade, will be very deceptive.
This explains the prevalence of reporting so-called non GAAP numbers and valuation based mostly thereon, however these changes can be questionable.
GAAP, regardless of the precision of the arithmetic, with all of the required estimation and guidelines is a really inexact science ( higher time period maybe artwork ).