Show S I WRITE OFFS' NEW POLICY I By VICTOR EUBANK I Associated Press Pres Financial Writer NEW YORK Nov 15 Readjust 15 Readjustment Readjust Readjust- ment meat of capital structures elimination elimination elimination elimina elimina- tion of or deadwood assets and a 3 general general gen gen- eral leveling of book book- values are now being considered by a number o of corporations corporations cor- cor as a means of getting back backo to o normalcy policies already have been seen inaugurated by a number of Important Important Im im- Im- Im por nt companies in the way of re reducing reducing reducing re- re values of fixed properties while others are studying ways of bringing their organizations into line with present conditions Auditing experts in their study of various reorganization proposals state that the writing down of assets to o their true values does docs not change the real financial status of a company nor does it alter the real or relative position of a stockholders stockholder's interest in int it t it resolves itself simply into a re restatement restatement restatement re- re statement of the values in the balance sheet Among various reasons for write downs the following are arc given by bythe bythe the he accounting firm of Ernst Ernst 1 The excess of plant capacity over and above what is necessary to meet neet the normal demands for production production tion Ion or wh what t s seems ms warranted by the the individual business and the industry as a whole 2 The excess capacity in the industry indus- indus try iry ry as a 3 whole and the relative posItion position tion Ion of ot the the company company In Jn th the l industry I. I 3 The trends in style or product that hat will affect the useful life of present present present pres pres- ent assets 4 The cost of ot replacement based on lower price levels for the materials and services represented in the assets 5 Excessive state and local taxes resulting from use of ot fictitious book values It is a safe prediction say the accountants based upon all we know of ot business history and our sentiment toward our business progress that stockholders managements and bankers bank bank- ers will give more weight to the delmr dollar dollar dol del lar mr actually earned In 1933 and subsequent subsequent subsequent quent years than to the dollar lost in 1931 and 1932 |