Semi Equipment-Sell when they're singing in the streets Message Board

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Technology Stocks : Semi Equipment-Sell when they're singing in the streets

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To: Ian@SI who wrote (202)	6/7/2000 3:51:00 PM
From: A. Wayne	of 276

Ian, I believe it's a missed bag for Legato. There were some changes by the SEC in the way companies report sales and earnings, particularly sales of software, in this case. Essentially, it is the case of reporting the sales and earnings when you basically write the sale up or when you deliver and the client installs and accepts the product. The SEC said you shouldn't report the sale until the client accepts the product. The SEC is therefore making a decision which affects the industry in the way software and service companies should report sales and earnings. This started Legato's problems. Where they got into real trouble was when some salesmen reported software as sold when they told the client they could return the product later if they decided they didn't want to keep it. This obviously is not compliant with GAAP. Wayne

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