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>GAAP rulea may dictate they book the revenue over the life of the OS to better match liabilities in the form of updates. MSFT want to book all the revenue now
by forgetsusername 10y ago
>GAAP rulea may dictate they book the revenue over the life of the OS to better match liabilities in the form of updates. MSFT want to book all the revenue now as an "economic reality".
I think you might be right; the revenue should be deferred over the life of Windows 10, but their non-GAAP measure books it up front. Hence the top line beat.
Not a particularly heinous accounting maneuver.
- chenster 10y agoSo the news is ... a lie?
- Dwolb 10y agoNot totally a lie. There are a finite number of accounting rules applied to unique businesses all over the country and globe. However, not all these rules allow a company to fully represent the financial state of the business. Therefore, companies try to reconcile these discrepancies through management guidance and non-GAAP accounting. As an observer, you need to make a judgement call on whether you agree with the GAAP numbers, the guidance numbers, or somewhere in between.