Bearded One, - "Unearned Revenue"
What you said is different from Microsoft's earnings report.
microsoft.com
Unearned Revenue
Microsoft believes that Internet technologies are integral to its products and has committed to integrating these technologies, such
as its browser, Microsoft Internet Explorer, into existing products at no additional cost to its customers. Given this strategy and
other commitments such as telephone support, Internet-based technical support, and unspecified product enhancements,
Microsoft recognizes approximately 20% of Windows operating systems revenue over the product life cycles, currently estimated at two years. The unearned portion of revenue from Windows operating systems was $1.10 billion at March 31, 1998.
Since Office 97 is also designed to be tightly integrated with the Internet, and in the view of subsequent delivery of new Internet
technologies, enhancements, and other support, a ratable revenue recognition policy became effective for Office 97 licenses in the
third quarter of fiscal 1997. Approximately 20% of Office 97 revenue is recognized ratably over the estimated 18-month product life cycle. Unearned revenue associated with Office 97 totaled $700 million at March 31, 1998.
Unearned revenue also includes maintenance and other subscription contracts, including custom enterprise license agreements. |
