Wind River going up, up, up! Message Board

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Technology Stocks : Wind River going up, up, up!

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To: umbro who wrote (7929)	6/7/2000 3:27:00 PM
From: JMD	Read Replies (2) of 10309

umbro, if you'll forgive me butting in [well aware than allen benn can speak for himself], but re: ". Back to the question of accounting for pre-paids: If the pre-paids are not immediately shown as revenue, when received, then where do the pre-paids show up? As some sort of 'intangible' on the balance sheet?" MSFT accounts for this stuff as 'deferred revenues' and carries it as a short term asset. In MSFT's case that little item is pushing the billion dollar (or more) category if memory serves. Analysts have actually taken offense that Softie uses it to smooth earnings by taking $$ out of the deferred revenue account and bringing them into current revenues (which then of course drop straight to the bottom line) whenever there's a need to shore up a weak quarter. Personally, I think that's a bit absurd and prefer very, very conservative accounting treatment of software revenue recognition so WRS' methodology is fine with me. Take a peek at MSTR to see the penalty for taking a more aggressive stance. best, mike doyle

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