Communications chip company


changed the accounting method on warrants related to its purchase of Israel's

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and said it may restate earnings to reflect a similar change with a previous acquisition, according to documents filed Monday with the

Securities and Exchange Commission


Broadcom wasn't available to comment.

Broadcom earlier this month warned of weak revenue and said

that it was in consultations with the SEC over how it should account for warrants held by the customers of companies it purchased. Warrants related to the VisionTech purchase will be accounted for as a reduction in revenue as they vest, the filing states. Under the previous method, warrants were also accounted for as goodwill and amortized. (Goodwill is the price a company pays in an acquisition above book value. It's then written down as a charge against earnings over time.)

In the filing, Broadcom also said it may restate earnings for the nine months ended Sept. 30, 2000, because of changes in the way it accounts for its purchase of

Altima Communications

last year. The company said it's still reviewing the possible accounting changes.

Broadcom purchased numerous companies in 2000 whose customers hold warrants that allow them to buy Broadcom shares if they follow through on agreements to purchase products. Broadcom cited the loss of such an agreement from customer



as one of the reasons it was reviewing its warrants practice. 3Com, which ended the agreement because of weak demand it was seeing, had the purchase agreement with Altima before Broadcom took it over. But investors and the press, including both

and the

The Wall Street Journal

, had already raised concerns about the warrants.

In addition to the revenue reduction issue, shareholders also were concerned that if the shares associated with the warrants were issued, they would dilute Broadcom's earnings per share at a time when the chip industry is struggling with shrinking demand.