Reduce the number of small entrepreneurial companies that will be able to develop or compete with established companies.
Cisco supports retention of pooling accounting for corporate mergers and acquisitions.
The FASB and SEC should complete existing analyses of this critical issue, including the impact of the proposed change on the U.S. economy, before taking action. Cisco welcomes the opportunity to work with FASB and with lawmakers on this important question. Pooling is often preferred in mergers of highly valued companies, where the mandatory goodwill amortization of the purchase method could distort public perceptions of corporate fiscal strength. America Online used pooling to acquire Netscape Communications. According to Goldman Sachs, a hypothetical merger between Intel and Microsoft would create an enormously profitable company in reality, that, on paper, would need to report an annual loss under purchase accounting.