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Technology Stocks : America On-Line: will it survive ...?
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To: Todd Daniels who wrote (4537)8/20/1997 10:18:00 AM
From: Todd Daniels   of 13594
 
Hmmmmmmmm.
Monday's Washington Post story on AOL acounting
washingtonpost.com
mentioned transcript of AOL Q3 earnings conference call. Curious,
I read it and found this. It appears to say that what AOL cited as
authority for recognition of $7m changed between May and August.

AOL at FULL DISCLOSURE/Archives
05/06/97
Q: Did you book $12 million of the $100 million Tel-Save payments into
revenues this quarter?
A: That's correct.The contract with Tel-Save requires us to recognize
through the end of the calendar year $57 million. $12 million was recognized in the March quarter ** under the contract, as a result of three clauses:** One, a signing bonus. Two, exclusivity. Third, and the largest component, is that we deliver production work for the advertising and interactive marketing area on the service.

08/07/97 AOL Q4 Earnings Release
*** During negotiations leading up to the execution of a definitive
agreement ***, Tel-Save and AOL agreed that $7 million of the $100 million paid at signing would be fully earned upon the announcement of the agreement and that AOL would have no further obligations to fulfill under the contract with regard to this amount.Thus, upon public announcement of the agreement, AOL believed it had earned the $7 million and had a basis for recognizing it in the third quarter.
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