METROMEDIA FIBER NETWORK (MFNX) Message Board

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Technology Stocks : METROMEDIA FIBER NETWORK (MFNX)

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To: Dennis O'Bell who wrote (658)	10/28/1999 6:51:00 PM
From: quidditch	Read Replies (1) of 1983

Dennis, re revenue recognition and MFNX/GBLX: I agree with Curtis' characterization, and percentage of completion method of recognition, though applied according to different calculations (accumulated cost as measure of completion/stated mileposts for percentage), it is conventional accounting policy. In the case of GBLX, a clarification: in July, when an analyst questioned GBLX's up-front recognition of sales of dark fiber (as opposed to percentage of completion concept), GBLX's management stated that it was applying standard recognition policies in recognizing the revenue up-front and that the percentage completion concept did not apply to sales of submarine fiber (that had every one scratching their heads). I think, but don't warrant 100%, that in its CC this week, GBLX back tracked from that position to apply the more conservative policy, and quibbled a bit by saying it had no cash effect (it doesn't) and simply defers revenue out over the period of the contract--I think $14 million was at issue. Just an observation. Steve

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