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financexec2

financexec2
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  • Gilead: A Growth Story [View article]
    You appear to be getting mixed up regarding Q2 and first half revenues and earnings. Therefore, your full year conclusion is incorrect.
    Aug 7 03:25 PM | Likes Like |Link to Comment
  • A Quantitative Look At IDRs And Their Impact On MLP Growth [View article]
    Wash rules only apply to a disposition at a capital loss.
    Apr 21 03:01 PM | Likes Like |Link to Comment
  • I Hit Apple's $7.47 June Quarter EPS, Here's What I Expect For The September Quarter [View article]
    Weighted average shares for quarterly EPS, with a separate weighted average shares calculation for annual EPS. The 4 quarters may not necessarily add to the year number, as is often the case when there is a significant increase or reduction in share count during the year.

    However, book value per share at any date is computed using the ending shares outstanding.
    Oct 22 12:24 PM | Likes Like |Link to Comment
  • Microsoft Dividend Raise Debate: 2013 Edition [View article]
    Re repurchase of shares using European cash, as suggested by previous poster kbphysicspy:

    That would be considered by the IRS as effectively a repatriation of foreign cash and would trigger a US tax at 35% less a credit for the amount of foreign taxes already paid on those funds.

    Effectively, this is the same IRS reasoning to not allow the foreign subsidiaries' cash to be loaned to the US (except in very limited, short-term circumstances).
    Jun 18 12:34 PM | 1 Like Like |Link to Comment
  • Healthcare: The New Value Sector [View article]
    IRY -- International Health Sector fund.
    Sep 4 10:35 AM | Likes Like |Link to Comment
  • HP's Bad Quarter Is A Buying Opportunity [View article]
    Question was raised about "The impairment stems from the recent trading values of HP stock ..."

    One of the accounting tests to determine if a goodwill impairment charge MIGHT be required compares is a comparison of market cap with stockholders' equity. The theory is -- if the market cap is less than stockholders' equity (which it is for HPQ), then there is likely an impairment of goodwill. This is only one of the considerations for an impairment charge, but it may well have been the reason here.
    Aug 26 05:27 PM | 2 Likes Like |Link to Comment
  • Supervalu Versus RadioShack: A Comparison Of Struggling Retailers [View article]
    "Depreciation and amortization is a non-cash operating expense. Part of the reason why the company saw a rapid increase in these expenses was because new acquisition accounting rules require these assets to be revalued at its current market value when the acquisition takes place. More often than not, this increases the value of the assets and increases the depreciation and amortization expense allowances of the combined company versus if each company was separate. This actually benefits acquirers since these expenses are tax deductible as an ordinary and necessary business expense and can save companies up to 40% of the purchase price."

    The first 3 sentences above are true, but the increased dep/amort expense from the new higher fair value of assets is not tax deductible in MOST acquisitions. For accting purposes, a deferred tax liability is recognized at the acquisition date and then amortized as a partial offset to the higher dep/amort expense. Thus, there is an accting benefit for reported P&L but not a cash flow benefit (i.e., no reduction in cash taxes).
    Aug 2 11:03 AM | Likes Like |Link to Comment
  • Transocean Has A Major Accounting Problem (And Many Others) [View article]
    You have made some good points, but (as mentioned by someone else above) RIG has a business problem; there is NOT an accounting problem.

    Certainly they overpaid for acquisitions, and the current market value of outstanding stock is less than RIG's book value, so the financial community recognizes that goodwill and book value may be overstated. Further, this excess of book value over market value, by itself, may be enough to lead to an accoounting impairment charge.

    You can be sure that the impairment charge was fully audited. The rules are very complex, and the required analysis is huge, generally requiring hiring an outside consulting firm, particularly when an impairment is indicated. I am guessing that they wrote off all the goodwill they were allowed to under the rules. Why do less? Judgment is involved, but you can also be sure that the charge taken was as much as they could take (i.e., conservative) so that management would not have to go back to the well again any time soon.

    So at the end of the day, what difference does it make if there is another $3B impairment charge? It would be a noncash charge, have no effect on operations or operating cash flows and most likely no effect on the stock price. A future impairment charge is already priced into the stock.
    May 28 01:10 PM | 4 Likes Like |Link to Comment
  • 6 Low Price/Free Cash Flow Stocks That Are Worth A Look [View article]
    Impairment charges are noncash expenses that, by rule, must be reported as part of operating income. Impairment reviews are conducted once per year, at a certain date for each business unit, and more often if there is an indication of possible impairment at another date. Most companies select the first day of their fourth quarter (e.g., October) as the standard impairment date as that gives them a full 3+ months to complete the review, and Q4 is the best quarter for most because the year-end audit is going on anyway.

    The FASB update will have little or no impact for most companies -- may make an impairment review easier if there is no impairment charge but no/little change if there is an impairment.
    Mar 27 02:04 AM | Likes Like |Link to Comment
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