[Foundation-l] thoughts on leakages

[Ray Saintonge]

Anthony wrote:
> On Jan 10, 2008 1:19 PM, Gregory Maxwell <gmaxwell at gmail.com> wrote:
>   
>> On Jan 10, 2008 1:08 PM, Gerard Meijssen <gerard.meijssen at gmail.com> wrote:
>>     
>>> Hoi,
>>> There is one thing that the Wikimedia Foundation has lots off. Goodwill.
>>> Many organisations value goodwill highly and have it as an item on their
>>> balance sheet..
>>>       
>> ... mostly because they've acquired other companies at substantial
>> multiples of their valuations
>> [http://en.wikipedia.org/wiki/Goodwill_(accounting)#Modern_meaning],
>> not due to fruits of initiatives like "don't be evil".
>>     
> Exactly.  [[Book value]] often has very little to do with [[market
> value]].  Confusing the two is a very common misconception, especially
> when dealing with [[intangible asset]]s.  Intangibles (like Goodwill,
> but also like trademarks) are valued on a balance sheet at the cost to
> purchase or develop them.  If you buy a trademark, it would go on the
> balance sheet at the price you paid for it.  If 10 years down the road
> the trademark is now worth 100 times as much as when you bought it,
> it's still listed on the balance sheet at the price you bought it for.
>  (Unless you're Enron, anyway.  Their use of [[mark to market]]
> accounting to eschew these principals is a big part of what got them
> in trouble.)
I very much agree.  I don't see much more book value to the trademarks 
and other intangibles than the amortizable legal costs of establishing 
them.  That's only a tiny fraction of the market value. 

Ec