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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Les H who wrote (157159)	3/26/2002 12:01:47 AM
From: Les H	Read Replies (2) of 436258

Microsoft 'Amends' its last two 10-Qs Microsoft Corp. (NasdaqNM: MSFT - news) (MSFT) amended its financial reports for the last two quarters to correct mistakes in its cash flow statements it says were caused by a clerical error. The world's largest software maker said the errors in its last two 10-Q filings with the Securities and Exchange Commission involved its "unearned revenue" account, an arcane but closely watched measure of Microsoft 's future results. Microsoft now says it recognized $1.879 billion in deferred revenue in the September quarter and booked $2.069 billion of new "unearned revenue." It had formerly reported recognizing $914 million and adding $1.104 billion to the " unearned revenue" balance that period. The net change remained an increase of $190 million for the three-month period. Microsoft previously said its "unearned revenue" balance stood at $5.85 billion on Sept. 30 . "This change had no impact on net cash from operations," the company said in documents filed with the SEC late Monday. In the software industry, the Redmond, Wash. , giant pioneered the practice of recording a portion of the revenue from some products as "unearned," starting with the release of the Windows 95 operating system. Microsoft now holds back a portion of revenue from Windows and Office suite sales until it "earns" the revenue by delivering interim upgrades, bug fixes and other customer support. For example, the company typically defers about 15% to 25% of Windows revenue and then books that amount over three years. "Just that line item was inaccurate," said a Microsoft spokeswoman, noting the quarterly reports were otherwise unchanged, except for an updated share count. She said the company amended two 10-Q filings because errors in the September quarter resulted in errors in the year-to-date calculation in the December quarter. For the six months ended Dec. 31 , Microsoft now says it set aside $4.790 billion as "unearned revenue" and recorded $3.828 billion of previously deferred revenue -- a net increase of $962 million. The "unearned revenue" account stood at $6.62 billion on Dec. 31 , up from $5.12 billion a year earlier, Microsoft has previously reported. biz.yahoo.com

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