December story ideas for business reporters & editors

TECHNOLOGY STOCKS TUMBLE BASED ON EARNINGS FEARS

Why have technology stocks fallen sharply in recent weeks? Largely because of concern about the economy, concerns about revenues and earnings in the technology sector, and uncertainty surrounding the presidential election, says Jon Duchac, associate professor of accountancy in the Calloway School of Business and Accountancy. “During technology’s up move in late 1999 and early 2000, the momentum of the market pulled highly speculative companies up, even if they didn’t have a supporting business model,” he says. “When the market got twitchy about those companies, the entire market got dragged down with them. The fallout has continued in recent weeks, with concerns over earnings and revenues from bellwether technology names.” To talk with Duchac about how the market will ultimately shake out, please call Sarah Smith in the News Service.

GIVING FINANCIAL GIFTS THIS HOLIDAY SEASON

Children often rummage through the Christmas packages to open the biggest box first, but adults know that the best presents often come in small packages-envelopes. For those who want to give stocks and bonds rather than toys for Christmas, Ralph Tower, a professor in Wake Forest’s Calloway School of Business and Accountancy, has some suggestions. Before you give junior a U.S. Savings Bond or decide to establish a savings account for your child’s education, you should know the tax laws your gift may fall under, Tower says. “The first step in financial giving this Christmas is to establish to whom you’re giving the gift,” he says. “Depending on where the gift is going, there are many ways to avoid paying a gift tax on it.” Tower is a licensed CPA in North Carolina and Florida and can discuss options for giving generously but wisely this holiday season. Please call Sarah Smith in the News Service to arrange an interview.

ACCOUNTING STANDARDS THREATEN PROSPERITY OF TECHNOLOGY MARKETS

Accounting standard setters have indicated their intent to change the method of accounting for mergers and acquisitions, a move that would significantly penalize the earnings of merging companies, says Jon Duchac, associate professor of accountancy in the Calloway School of Business and Accountancy. Duchac has testified before Congress on behalf of Merrill Lynch urging the Financial Accounting Standards Board to reach common ground with the technology industry. “The change could result in a significant slowdown in the mergers and acquisitions activity that has existed in the tech sector over the past couple of years,” he says. “The United States economy could be directly affected by this.” Duchac expects the standards will be set in the first or second quarter of 2001. To arrange an interview with Duchac, please call Sarah Smith in the News Service.