After transitioning to a unified organizational structure, Intel Corporation (NASDAQ:INTC) will reflect the same into its accounting practice as well. The advanced chip maker company said that it will report operating results for both PC and mobile device groups in a combined manner instead of stating it out separately. The move comes as a part of the company’s adoption of a joint sales pitch for both the groups over its earlier strategy of pitching the two divisions differently.
Change in accounting computation
Unarguably, Intel Corporation (NASDAQ:INTC)’s decision will favor it the most as where it lose nearly $1 billion per quarter in its Mobile and Communications Group, its PC Client Group generates billions of profit. Thus, by combining the reporting of two divisions, Intel Corporation (NASDAQ:INTC) will be able to hide losses from its Mobile group under the profits earned from PC group.
However, the company’s representative, Cara Walker, has asserted that the decision is not aimed to conceal the losses made in the mobile group, rather reflect the corporate organizational move. She said that the company has amalgamated its two divisions, which should rightly come into effect in its accounting practice as well.
Will it conceal the reality?
The change in accounting will be applicable starting April 14, as per Intel Corporation (NASDAQ:INTC)’s press release. Meanwhile, Intel has assured that it will continue to provide insights on its mobile group performance.
Patrick Moorhead, analyst at Moor Insights & Strategy said that though it will difficult to know the exact happenings around Intel’s mobile division but a reasonable amount of information from the company should help investors keep abreast with its progress. The company reported $4 billion of loss from its mobile division last year. Moorhead agreed that change in accounting practice by the company is nothing but an effort to align with the changed reporting framework that it embraced few months back.
