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December 18, 2006

All Business: Some homebuilders taking the 'big bath'

  • Wall Street analysts warn investors homebuilders might be taking them for a bit of a ride with their massive writedowns.
    • By RACHEL BECK
    AP Business Writer

    NEW YORK — In accounting circles, it is known as the “big bath” when companies try to wash away as much bad news as possible with the hope that charges taken all at once will make their finances look better in the quarters to come.

    That's something the nation's homebuilders could be up to lately. With their profits plunging due to a sharp drop in sales of new homes, many are taking big writedowns in their land values and other assets because they are worth less than they paid for them.


     
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