My guess is that "one time payment" included both lump sum for the License Agreement but also the owed Royalties since May 2007. The current and arrears in royalties since May 2007 will have to be accounted for in income in this fiscal year.
Ok. But...
Ehud Goldblum, desperate to turn a nut to hold onto into any available small crack, asked :
"... that .07 to .13 that we are adding to fiscal year '08, therefore includes some restatement of Q1 to Q3, some bumping up of those quarters, so that will be in Q4.... I assume that the .07 to .13 also includes some amount of the one time payment and even though it'll be amortized, we assume that more of it ends up in '08 than ends up in future years, or are you assuming that it all gets amortized evenly?"
Bill: "... yes you are correct that .07 to .13 estimate for the 4th quarter includes a catch up so to speak from amounts owed in the past that now as a result of this settlement agreement, we expect it will be what we record in the fourth quarter. That 4th quarter amount at this point I expect will all be an amortization of the upfront payment, a partial amortization of the upfront payment, and as Steve said it is a very substantial upfront payment, much more than what has been owed for the past and a portion of it is a payment for the future. Okay?"
So, as muddy as that is, your proposal that the "one time payment" included both lump sum for the License Agreement but also the owed Royalties since May 2007. The current and arrears in royalties since May 2007 will have to be accounted for in income in this fiscal year is also unclear to me. I just don't see much if any of it showing up in Q4 income guidance, and neither do Ehud or Bill. I'm with Ehud. "That's just [a measly dime, man. my paraphrase]. I have to understand how the mechanics of that work", Ehud begged.
I remember the change to amortizing license fees. I've never seen amortization of royalties payable or paid. But I haven't read all these posts yet. Am I oblivious to something obvious?
I think we all want to see it in the share price, but that does not equate to instantaneous EPS
"Instantaneous EPS" sounds pretty good to me, something an investor can sink his teeth into. I'm sure something could be worked out in the tax department back to '07. There's nothing wrong or dumb about putting it where it belongs. |
