Purchase price acctg adjustments that bypass income statement

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Hi,

Recently I listened to Men's Wearhouse 3Q 2014 earnings call. On the call, mgmt. noted that they made two writedowns: $50mm related to the inventory of the recently acquired Jos A Bank, and $10mm to MW's tuxedo inventory.

Mgmt noted that the $50mm writedown would not hit PNL, due to "complexities from purchase price accounting adjustments", while the $10mm will hit PNL.

Can someone please explain how this works?

Thank you,
Wes
 

Samir

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Good question. I'd like to know how to do this too!
 

bklynboy

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They probably took the writedown against goodwill asset
 

Samir

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I never thought about doing that--smart way to do it.
 

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