Hi Elmo - Did you read the article in the Monday San Jose Mercury News Business Monday September 22, 1997 titled..."Q&A, On the Future of Novell; How new CEO hopes to revive ailing Novell"?
I could not find the link but I think everybody would find the article informative. I found this question by the author to be relevant to Jim's review and estimates of past and future revenues.
"...Q You took a big hit against earnings and some have suggested that was a judgement call, that there were other ways to handel that through acounting techniques. Can you tell us the pros and cons of that decision?"
"...A The company has had a history of aggressive sales, of pushing the envelope on some of the accounting, I mean they were legal, but when there is discretion I think that on balance, it wasn't as conservative as it should have been. So, when we did the initial accounting reviews, we discovered things like, there were deals that were in place but there was a side letter. Or there was a verbal understanding. And in every case we defaulted to the most conservative accounting. That has the benefit that when revenue gets strong and so forth, then all those deferrals begin to add incremental growth. So, I guess for me it is not an option to be just incredibly detailed and conservative..."
If you can find the complete interview and post, it would be interesting to hear what everybody else has to say. My take on it is that CEO Schmidt will take the "conservative" road and perhaps may surprise the street. However, based on the street estimates it appears to me that they may have already factored CEO Schmidt's conservative approach into their numbers.
EKS (Except for the quotes the rest is my opinion and reflects my views only...I only represent myself and nobody else) |
