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Typically, you can claim the credit in its entirety or amortize it over a period of 60 months.
"We're able to amortize it over several users," Mr. Farkas said.
Perhaps in an ideal world accountants would capitalize R&D and then amortize it over the lives of the resulting products.
This is not illegal, but if they write off the goodwill, they don't have to amortize it over the next 40 years, which is a benefit to future earnings.
Under this system, which the Securities & Exchange Commission tried, and failed, to ban in the early 1980s, companies lump all the expenses of finding and buying reserves into one big account and amortize it over time, instead of charging costs against earnings as they're incurred.
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Accounting rule changes instituted a few years ago require that all marketing expenses must be booked in the same quarter the money goes out, instead of amortizing it over the life of the movie.
Every year Fiserv produces software, but rather than expense that cost against earnings, the company declares the software as an asset and amortizes it over time.
Let's say, in our above example, that they did all of their marketing spend in year one, then amortized it over five years in the income account.
Analysts did not appear to have taken into account that Motorola deferred $200 million in revenue from sales of smart phones, amortizing it instead over two years, in a new accounting step, according to the Associated Press.
Amortizing it over four years, that's only $4.23 a day.
According to Goodyear, the issue may have no impact on its previously reported financial results, or may result in the company recognizing up to the entire amount as a pre-tax expense in 2000 rather than amortizing it over 10 years.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com