Baalzamon said:
Just to set the record straight for those here who clearly have no clue what writing off goodwill is. It most certainly IS a loss. Microsoft paid X billion dollars for Nokia, and a good portion of the acquisition went to the balance sheet account 'goodwill'. Now, Microsoft is saying that this balance sheet account, which they paid X billion dollars for, isn't actually worth X minus 7.4 billion dollars. In other words, $7.4 billion of money actually spent by Microsoft is worth absolutely nothing.
As a general rule, if you have no clue how GAAP accounting works (mandatory for SEC filings), you should probably avoid saying that a loss reported in GAAP isn't a true loss. |
I appreciate your attempt to say exactly what I said with much more detail. However, my point is exactly the same as yours. MS devalued an asset. Companies devalue large assets all the time in off peak quarters where they had otherwise quality results. They do so to avoid scrutiny during other times. Clearly, MS has decided to jettison the "husk" of the business that they bought from Nokia through layoffs and such. But, what they bought and still have is an entrence into the smartphone hardware business and a retention of their presence in the mobile software biz. Because those things can't be physically tracked, no value can be directly attributed to them. The "husk" was thrown away and the cost wrote down. The actual thing that they wanted they kept. THe reason that the company's value is the same today as it was 2 weeks ago before the write down is that everyone knows what I just said. They know that the husk had no real value.
It is near the end of the end....