Sprint Nextel Corp has announced that it may write down as much as $31 billion of goodwill currently recording on its balance sheet. This is due to that fact that Sprint Nextel’s evaluation of the real value of goodwill attached to the Nextel deal is far, far less than estimated.
From the 8K:
“Based on the work completed to date, Sprint Nextel will be Sprint Nextel 8K Notice of Possible Nextel writedown required to record a material, non-cash impairment charge that will represent a substantial portion, and potentially all, of the goodwill recorded on it balance sheet at the conclusion of the second test of the goodwill assessment.”
The write down hit will occur in and be reported in the 4Q08 results.
I’ll bet that things at Nextel are so scary that staff can hear a pin drop. Are lay off notices coming, too?
Attached to this message is Sprint Nextel’s 8K announcement: