Gillette Loses $8 Billion Dollars Following "Woke" "Toxic Masculinity" Commercials

R

R181

Grumpy old man
Len said:
Public companies must declare valuations on a quarterly and annual basis. Notice that nothing approaching the tune of an $8 B write down occurred in previous quarters or years since P&G has owned Gillette.
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I am guessing that public companies can decide when to take a write down or not take one for that matter. If that is the case then the devaluation can occur over a number of years and then be taken at an opportune time at a later date. There must be an off set to the benefit of the company taking a write down too. If we could run our household books like companies do we'd all be laughing.

Bob
 
Len

Len

Forum GOD!
R181 said:
I am guessing that public companies can decide when to take a write down or not take one for that matter. If that is the case then the devaluation can occur over a number of years and then be taken at an opportune time at a later date. There must be an off set to the benefit of the company taking a write down too. If we could run our household books like companies do we'd all be laughing.

Bob
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This is incorrect. CNBC reports that the $8 B write off was an impairment charge to the brand's goodwill valuation:

"P&G reported an impairment charge of $8.0 billion in the fiscal fourth quarter, resulting in a net loss of $5.24 billion. The one-time, noncash charge was to adjust the carrying values of Gillette’s goodwill and intangible assets."

www.cnbc.com

Procter & Gamble writes down Gillette business but remains confident in its future

Despite Procter & Gamble's write-down of its Gillette shaving business, executives said they remain confident about the future of the grooming category.
www.cnbc.com www.cnbc.com

Goodwill valuations and impairment charges are legally required to be reported at least annually by the SEC. A public company cannot adjust valuation whenever they feel like it. It is a line item that must be publicly adjusted and disclosed to the SEC yearly.

"...the goodwill must be tested (at least annually) to determine if the recorded value of the goodwill is greater than the fair value. If the fair value is less than the carrying value, the goodwill is deemed "impaired" and must be charged off. This charge reduces the value of goodwill to the fair market value and represents a "mark-to-market" charge."

www.investopedia.com

Understanding Impairment Charges

An impairment charge is a term used to describe writing off worthless goodwill. Learn its potential impact on EPS.
www.investopedia.com www.investopedia.com

www.investorwords.com

What is Impairment Charge? definition and meaning

Definition of impairment charge: A specific reduction on a company's balance sheet that adjusts the value of a company's goodwill. Due to accounting...
www.investorwords.com www.investorwords.com

Impaired asset - Wikipedia

en.wikipedia.org en.wikipedia.org

Again, I repeat, what specifically has happened in the past year to cause such a monumental valuation drop for Gillette, dwarfing previous years' losses?

It is amazing watching the amount of twisting and contortion required to deny or explain away the obvious, both with Gillette's financial crash this year, and with denying the more obvious in your face propaganda included in their toxic masculinity ads. Thankfully the average man or woman can see and understand both clearly, though obviously not nimble enough to be P&G CEO material.
 
MntnMan62

MntnMan62

Forum GOD!
Len, I was reading an article that said that this is the first time P&G has written down Gillette's market value since acquisition in 1999. The article indicated that P&G feels the value of the company has declined by $8 billion since the company was acquired for $57 billion. If there is a requirement to revalue a company every year, it seems odd that the entire reduction in value occurred during the past year. It seems that the decline in value has been more gradual and has taken place since the acquisition. Was the valuation requirement recently put into law, say within the past two years? I just find it hard to believe that 14% of the company's value was wiped out in only one year. I guess it's certainly possible but I question that, just like I question everything that seems outsized.
 
Len

Len

Forum GOD!
MntnMan62 said:
Len, I was reading an article that said that this is the first time P&G has written down Gillette's market value since acquisition in 1999. The article indicated that P&G feels the value of the company has declined by $8 billion since the company was acquired for $57 billion. If there is a requirement to revalue a company every year, it seems odd that the entire reduction in value occurred during the past year. It seems that the decline in value has been more gradual and has taken place since the acquisition. Was the valuation requirement recently put into law, say within the past two years? I just find it hard to believe that 14% of the company's value was wiped out in only one year. I guess it's certainly possible but I question that, just like I question everything that seems outsized.
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Reporting asset impairment and the annual revaluation of goodwill became a legal requirement as of 1983. There were updates to how goodwill was supposed to be valued in 1995, 1999, and last updated in 2001.

If P&G disclosed no difference in annual valuation from its acquisition of Gillette thru 2018, then P&G actually saw no difference in valuation during these years, or more likely, were able to bend the numbers to hide the decline during this time, but hit such a massive decline in 2019 that they had no choice but to fully report the loss; numbers bending so badly they would have broken otherwise.

In either case, whether the decline was gradual or sudden, something happened in 2019 that drove the valuation off a cliff.
 
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