By Hyder, Zakia
Folio: the Magazine for Magazine Management , Vol. 20, No. 12
The White House has endorsed legislation, introduced recently by U.S. Representative Dan Rostenkowski (D-Ill.), allow amortization of goodwill or acquired intangibles such as subscriber lists.
"This bill is a great idea for publishers," says magazine consultant James Kobak. In recent years, there have been several judicial disputes between the internal Revenue Service and magazine publishers over the write-off of lists that publishers purchase as part of an acquisition.
The bill already has the backing of the U.S. Treasury DepartMent. Previously unwilling to recognize goodwill or acquired intangibles as amortizable, the department has had a change of heart. Kenneth Gideon, assistant treasury secretary for tax policY, SaYs the bill will keep U.S. firms competitive with foreign companies.
Some see a problem with the bill, however. The 14-year amortization period recommended by Rostenkowski is impractical in the case of a three- to four-year magazine subscription, says Kobak, who is arguing for a shorter amortization period.
At the same time, Rostenkowski's bill is largely favorable to publishers. …