Submission + - Behind the Microsoft write-off of Nokia (techcrunch.com)
UnknowingFool writes: Previously Microsoft had announced that they write-off the Nokia purchase for $7.6B in the last quarter. In doing so Microsoft would create only the third unprofitable quarter in the company's history. Released on July 31, new financial documents detail some of the reasoning and financials behind this decision. At the core of the problem was that the Phone Hardware business was only worth $116M after adjusting for costs and market factors. One of those factors was poor sales of Nokia handhelds in 2015. Financially it made more sense to write it all off.
the carrying value of Phone Hardware goodwill exceeded its estimated fair value. Accordingly, we recorded a goodwill impairment charge of $5.1 billion, reducing Phone Hardware’s goodwill from $5.4 billion to $116 million