Posted by: subzero
In reply to: Jules2 who wrote msg# 18582 Date:11/24/2003 2:28:32 AM
Post #of 18602
"How AMD exersizes it would depend on the perceived tax liability."
Why would AMD care about Tax liability?
Taxes are only paid on profits - and AMD hasn't made a profit in a coon's age.
I would think any business at some point expects to be profitable.
The point I was trying to make was it does not matter if the Fabs are connected phisycaly in some way or not.
German Law may be diferent.
In the USA one has to follow IRS regs.
Fab 36 is a new asset. It's been my experiance that you could treat it as such without violating the IRS regs. Conversly one could treat it as an improvement to Fab-30.
If it's treated as a new fab the co. can depreciate the Fab over a 31.5 year period (if mem serves)i'm too lazy to look it up.
If it's treated as an improvement to Fab-30 the cost is added to the amount in the asset colume account that represents whatever is left to write off on Fab-30.
Lets say, Fab-30 uses staight-line depreciation?
According to the IRS the additional dep. amount would have to also be straight-line.
Lets say they call it a NEW fab.
They then could depreciate it over the 31 or so year period and use "sum of the digets" rather than straight line. This would enable them to depreciate more of the cost in the early years, less in the later years.
There are many factors involved in these transactions. No one on this board or any other is privy to whats going on exactly.
Noone knows how the German equivelent to the IRS will apply regulations to depreciation etc.
It's all speculation and BS whith respect to outsiders statements including yours truly.
All we can do is guess.
Jules
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