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The point is that a proper understanding of the business model allows you to conduct valuations, capturing all revenues and expenses, away from the financial st
by chernevik 14y ago
The point is that a proper understanding of the business model allows you to conduct valuations, capturing all revenues and expenses, away from the financial statements. Those should absolutely reconcile back to statements. But they aren't driven by statement classification of items. Properly done, those models would have shown these problems.
HP is essentially saying "They didn't tell us X was in the marketing costs!" Well, then HP weren't asking the right questions about marketing strategy and drivers, and about relationships with customers and partners.
- objclxt 14y agoI take your point - what I meant to add in my reply but forgot to was that I doubt allocation of marketing spend / revenue was the only problem. Autonomy's revenue in 2010 was $870m - I'm sure the accounting issues are considerably more complex than what's been reported so far. I don't think HP escape culpability, but for all we know someone at the auditors or HP were asking the right questions, and were being deliberately misled.