whilst write downs of intangibles do not effect cash at bank, the writedown has implications on future cash flows. The writedown is basically management saying that the future cash flow streams are not sufficient to cover the value of the intangibles. In other words future profits are less than anticipated when testing the value of the intangibles on the balance sheet. Hence the need to write down!!!
So basically the writedown means managements own internal long term forecasts of profitability have reduced!!!
MCP Price at posting:
61.0¢ Sentiment: None Disclosure: Not Held
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