The Accounting Neverland: Software that refuses to grow up

One way to perform due diligence on a company is to look at the estimated useful life assumptions behind the depreciation and amortization calculations.  Overly optimistic assumptions will inflate reported earnings while overly conservative assumptions will deflate reported earnings.

One outlier is Continental Resources (CLR).  This oil and gas producer estimates that the useful life of its “Enterprise resource planning software” will be 25 years.  So let’s take a trip down memory lane and examine what software looked like two and a half decades ago…

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