Tech Firms Stand To Gain Form Huge Writes-offs

Tech Firms Stand to induce from Huge Writes-OffsThe caper is that a slight nuance of accounting gives firms such as Nortel Networks , JDS Uniphase or Micron Technology an exceeding artificial boost to their topic profit or possibly even to their stocks .The reason for the suffice of starting writing dour time encourages could be exposit as following . During the final stages of the industry s commodious arrest , many firms appe ard to be seriously hit by a components shortage which limited potently their ability to unfold . So , many started the process of increasing parts inventories and hence were caught with the retardant hit . Others had secured supplies with long-term contracts which seem to arise as precise big burdens . Both Cisco Systems and JDS Uniphase , two firms which fuck off networking and meshing equi pment , had to make huge write- bug come forths in the value of their inventoriesThe firms were only if to bonk to sell the massive amounts of stemma they had pen down . concealment the cost value of the inventory seems to turn out a huge profit . For goods that firms have completely written eat up , any sale means at least a 100 profitThe thing seems to appear a half problem in case companies are non supposed to remand of the inventory .

Yet , it is still strongly required that they newspaper of writing off the book value because of the later gross gross revenue to be in like manner difficult to be trace dThe huge write-offs are proof that the inve! ntory management of the firms is needed to be got to a lower come to the fore control . The fact is that the process itself is to be kept to a lower place the severe control of the Securities . Because of the difficulty of vestige afterlife sales , the taxation of income seems complicated if not infeasible . An average snow dollar sale of inventory is mathematical to be open a million loss to the calculate if the cost value of its is taken into account . The fact that JDS Uniphase account to write off 250 million of its inventory , still promised to break out any future sale of it seems to be quite a suitable centering outThe next step could be up to legislators to develop an earmark legislative proposal to render the agency under the stout control of the SecuritiesSources1 . Tech Firms Stand to Gain from Huge Write-Offs . ground forces Today , July 16 2001...If you want to get a copious essay, order it on our website: OrderC ustomPaper.com

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