Investment Write-Downs

Microsoft has written down more than US$9.3 billion in the value of its investments since the beginning of fiscal year 2001 (July 1, 2000), but has more than offset these write-downs by gains from other investment sources, leading to a total net gain on investments of US$546 million. This chart shows the write-downs from that quarter to the most recently reported quarter (which ended Mar. 31, 2003), as well as Microsoft’s total gain or loss on investments in each quarter.

Microsoft reports its total investment income or loss to the nearest million dollars. This figure includes write-downs in the value of investments (Microsoft calls these “other-than-temporary impairments”), which Microsoft is forced to take under certain circumstances, such as when it sells its stake in an investee or the investee declares bankruptcy. Microsoft does not always report detailed figures for these write-downs. Investment income or loss also includes gains from interest and dividends, gains from selling investments, and gains or losses from derivative instruments.