Some interesting reading on software revenue recognition...if you have Acrobat, you may want to read it. Something for everyone to consider in purchasing any software stocks... If you want the whole 9pp, let me know. It's boring stuff, but here's the preface (by Robbi Stephens):
SOFTWARE REVENUE RECOGNITION UNDER SOP 97-2
Marshall Senk (415) 693-3442 marshall_senk@rsco.com
Eric B. Upin (415) 693-3441 eric_upin@rsco.com
After December 15, 1997, the Accounting Standards Executive Committee's Statement of
Position (SOP) 97-2 superceded SOP 91-1, which went into effect after December 15, 1991.
We believe the most significant change from the 1991 ruling involves the new instructions
used to determine fair value for the parts of multi-element software sales. Prior to the
current guidelines, no specific instructions existed to determine how much revenue to
allocate among the parts of a bundled sale, and in response, industry practices varied
widely.
In most cases, we believe the impact of the new SOP will be minimal as it seeks to expand
and clarify issues already treated in SOP 91-1.
While valuations may be volatile during the adoption of the new statute, we remain
convinced that the underlying business opportunity facing the software industry remains
compelling and believe that the consequent investment opportunity is among the most
attractive within the technology and growth sectors. |
