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Strategies & Market Trends : Steve's Channelling Thread

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To: Zeev Hed who wrote (2790)	6/26/2000 10:39:00 PM
From: Logain Ablar	Read Replies (1) of 30051

Zeev: I should be able to find out later this week more details but right now I would think the SEC needs additional time to address the issues presented by the SEMI industry as well as other equipment manufacturers (GE, UTC, etc., this just doesn't impact the semi equipment companies). Under the UCC (its been about 25 years since I studied the uniform commercial code and that was only in an undergraduate law class) I would think the equipment makers have a valid claim to collect once the equpment is shipped vs. accepted but it will depend on the arrangement. I don't think its politically motivated from a partisan election standpoint but do believe the equipment manufacturers have been lobbying hard to have their case heard. When the FASB sets a standard there are hearings and FASB does listen to all viewpoints presented. When the AICPA issues statements of position (similar to what the SEC has done here) they have a committe that includes members of the big 5 and industry. I'm not sure what input the SEC had in the development of their guidance. I read the original bulletin and while I know where the SEC is coming from (the don't want companies to "improperly" accelerate revenue) their question and answer guidance and "acceptance" terminology has put equipment manufacturers in a bind. In my opinion even if a company were to take a position that they don't fall under the guidelines and could record the sale when shipped(reasonable people can differ on opinions but I can see an arguement under the Q&A to still record when shipped) the auditors signing off on the statements would have to issue a qualified opinion (either that or set themselves up for large liability exposure because a fair attorney could eaisly set up opposing arguements to the position). That would be too much of a conflict and wouldn't happen so the company would have to implement (it would be difficult for the audit committee to approve). Tim

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