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Microsoft SLASHES 7,800 bods, BURNS $7.6bn off books in Nokia adjustment

Charlie Clark Silver badge

Valuations, especially write-downs, are primarily accounting devices. Take a bet on an acquisition and it doesn't pan out then it's much smarter to write it off quickly otherwise you carry the inflated value of the assets on the books as goodwill for years.

A big hit in this quarter gets the bad news out of the door and will make next quarter look all the better. A big hit can also be nicely offset against profits to reduce the tax bill.

Interesting that Skype, which Microsoft outbid itself for, has yet to be written down.

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