Spyglass Message Board - Msg: 11653405

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Technology Stocks : Spyglass

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To: Bruce Cullen who wrote (1119)	10/20/1999 3:55:00 PM
From: Art Bechhoefer	Read Replies (3) of 1412

Bruce, I did call SPYG and talked with Mr. Vilchik (sp?) about a week ago, which is what prompted my questions. He said that when they sign a consulting contract, there are certain benchmarks, dates for deliverables, and partial payment clauses built into the contract. Once SPYG meets those conditions, it then records some of the fees, though actual payment may come later. This is a normal situation in which accrual accounting would probably be the best way to treat revenues and ongoing expenses. The reasoning behind my question is that if a business records some of these fees or revenues up front, then there may be less revenue from that particular contract to report later. Ultimately one of the things an investor wants to know is the impact of revenue increases on the bottom line. The latest report shows that SPYG revenues went up about 49 percent above the same period last year. That's a pretty good increase, but what does it mean in terms of future earnings? Will future earnings from an existing contract be down because many of the contract fees have already been reported?

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