Sony: upping FY operating income, net income and sales

[huiii]

KingofTrolls said:

huiii said:

I'm not trying to jump in on the argument betwen you and kowen (in fact i agree that restructuring is costly and the effects of it are only seen later on) but buying anything (gaikai, emi, sony- ericson, whatever) has no effect on earnings whatsoever. It's a simple excange of assets and doesn't touch the earning report, so it doesn't affect loss or profit.

I see a lot of people on here makeing that mistake so i thought i'd try to clear that up.

Oh God,
When you buy something, you have to pay for it. Money does not come from nowhere. This is not a simple exchange of assets but investing.

 Sony bought Gaikai for $ 300 million, but that does not mean that Gaikai is worth exactly $ 300 million. This does not mean that Sony is swapped with Gaikai 300 million dollars. This means that Sony has paid the owner Gaikai  - but instead gained ownership of Gaikai. Ownership of Gaikai is worth, for Sony, 300 million dollars. This is the basis of investment - in order to win, you have to put money first.

Never heard of accounting have you?

Yes they do have to pay for it. What do they pay with? Money. Money in the balancesheet is under assets. If the transaction takes place they swap money for the ownership of gaikai or whatever and where does that show up? under assets as well. 

No touching the earningreport and so haveing no influence on profit or loss since that is calculated in the earning report.

KingofTrolls indeed.