Changes in intangibles and a whole range of other non-cash items should ONLY affect share price if they reveal new information to the market. Analysts spend their lives opining on such matters, so book write-downs etc. rarely surprise the market.
As my brother-in-law, a CA, likes to say: "CASH is real; PROFIT is just an accounting opinion!" Any time you're looking at STATED earnings, you've got to take a view on QUALITY of earnings, eg. how aggressively are tangible assets depreciated? Arcane questions, but few investors look past the headline numbers. Remember ABC LEARNING CENTRES?
Another example is some huge non-cash hits that companies took when they switched to IFRS. Did any real changes occur or did this affect share prices?
WES Price at posting:
$15.38 Sentiment: LT Buy Disclosure: Held
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