Ann: FY23 Half Year Media Release, page-10

"Consensus is adding back the amortsiation of acquired intangibles, hence the discrepancy. Consensus EPS for FY24, which is really EPSa, is around 87cps on my sources."

Yeah, I was aware of that and I suspected that was the difference.

But I have to say, (like @marron123 in his subsequent post) this business of adding back amortisation of acquired intangibles has never sat comfortably with me.

Like all assets, intangible capital needs to be serviced:

- in the case of goodwill arising on acquisition, by the ongoing profits generated by the acquired entity

and

- in the case of the intangible assets held by the acquired entity, then by ongoing investment in those intangible assets, just like the intangible assets owned by the acquiring entity.


So, while it is a convention that is now widely adopted, my spidey senses tell me that by adding back amortisation of acquired intangibles, you aren't properly accounting for the charge that should reasonably accompany them.


What am I missing? (Genuine question)

.