Spending surge.(Bottom Line)(Brief Article)

Industry Week, March, 2004 by McClenahen, John S.; Purdum, Traci

Depreciation may be under-appreciated--except by CFOs and some number-savvy CEOs, But if the economic analysts at New York-based Merrill Lynch & Co, are correct, a temporary 50% accelerated depreciation allowance now in the U.S. tax code could produce a surge in capital expenditures later this year. And that could mean big business for computer makers and software producers, among others.

In simplest terms, the tax prevision allows companies In claim accelerated depreciation on equipment that can be written off in 20 years or less and is installed after May 5, 2003, and before Jan. 1, 2005. "... This could touch off a late-year, pre-Y2K-style spending spree as CFOs convince management that it is cost-effective to spend part of the '05 budget in late 2004,"...

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