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Non-Tech : Amati investors

AMTX 1.645

+6.5%

Jan 8 3:59 PM EST

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To: pat mudge who wrote (6988)	12/15/1996 5:35:00 PM
From: John Morrison	of 31386

>>> "At what point are revenues accounted for", Pat <<< That is usually explained in financial reports. So, I found the following in Amati's last 10-K, 11/06/96 (available on Edgar database) -- REVENUE RECOGNITION The Company generally recognizes revenue from product sales upon shipment to the customer. Revenues from software and engineering development services are recognized as the Company performs the services in accordance with contract terms. Revenues from maintenance and extended warranty agreements are recognized ratably over the term of the agreement. The Company also licenses products to OEMs and recognizes royalties as specified in the license agreement when shipment of the licensed product by the OEM is reported to the Company. Service maintenance, warranty and support revenues accounted for less than 10% of the Company's total revenues. The Company recognizes revenue from sales of software in accordance with the American Institute of Certified Public Accountants' Statement of Position ("SOP") 91-1, "Software Revenue Recognition." The SOP requires, among other things, that the sales value of post contract customer support which is included as part of an initial warranty period, must be deferred and amortized over the warranty period. Deferred revenues related to post-contract customer support were $68,000 and $123,000 for fiscal years 1995 and 1996, respectively. These costs are included in accrued expenses in the Company's Consolidated Balance Sheets. ---- end of excerpt from Amati's 10K --- John

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