Intel Writes Almost $1B Off Clearwire Investment

[qi:050] Aside from slashing its sales estimates today, Intel said it would take a $950 million impairment charge related to its investment in Clearwire, citing a decline in Cleawire’s stock price (to $4.93 as of Dec. 31). Intel has invested millions into Clearwire, which is building a nationwide WiMAX network, with the hopes of selling more chips into web-connected portable computers. From Intel’s release:

The company now expects the net gain or loss from equity investments and interest and other to be a loss of between $1.1 billion and $1.2 billion versus a previous expectation of a loss of approximately $50 million.

While Clearwire comprises a lot of that amount, there’s an extra $150 million to $250 million in there that is likely a result of the financial crisis forcing Intel to write down some assets. And it likely won’t be the only company reporting these charges. Under current accounting rules, a company has to test for “impairment,” or whether or not an intangible asset such as an equity investment has gone down, every year. And in the U.S., once an asset is impaired, it can’t get added back onto the books, even if the value does eventually rise.

With the 30 percent declines in the stock market over the last year, many companies will see the value of assets they bought following the market’s downward trend. Time Warner also reported a $25 billion impairment charge today. The U.S. accounting rules may be changing in response to the stock market decline leading to such large write downs, but in the meantime, Intel’s investment in Clearwire looks like a financial failure. We’ll still have to wait to see if it becomes a business success by helping Intel sell more chips.

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