In 2-years Cisco's goodwill soared +$7.241 billion (+42.59%) with a -$188 million net income decline

Is it possible that Cisco CEO John Chambers is overstating Cisco's net income? What are the implications for Cisco's stockholders?

New York City:   Fri, 8/29/14 - 4:04pm    View comments
 

5-years ago the Haas School of Business, University of California Berkeley, published the following paper:

Has Goodwill Accounting Gone Bad?

The Haas paper's conclusion (page 25)?
 

"Overall, our results suggest that management exploit the discretion afforded by FAS 142 to temporarily overstate goodwill, earnings and stock prices."
 

In 2-years (FY14 and FY12) Cisco's goodwill soared +$7.241 billion (+42.59%) with a -$188 million net income decline.

Is it possible that Cisco CEO John Chambers is overstating Cisco's net income?

What are the implications for Cisco's stockholders?
 

What's your take?

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