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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 137.34+0.8%Feb 6 9:30 AM EST
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To: David E. Taylor who wrote (81160)10/17/2008 2:21:17 PM
From: pyslent  Read Replies (1) of 197626
 
The only vague aspect is exactly how much of the total EUR 1.7 is attributable to these two components.

Agree with much of what you said, especially with respect to the arbitrariness of the split between back-royalties and "bulk." My impression is that for simplicity sake, Nokia intends to back out what they have been booking as royalty provisions from the upfront fee, and assign the remainder as prepayment to be expensed over 15 years. Otherwise, I think they would have discussed their intention to restate earnings from the past 5 quarters.

At the end of the day, Nokia will have arbitrarily picked a royalty rate that was less than the previous agreement but more than the current agreement, and applied it to the past 5 quarters. I don't know if accounting standards require that Qualcomm follow suit in booking the same amount as their one-time back-royalty revenue amount.
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