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Technology Stocks : Dell Technologies Inc.

DELL 136.10

-3.2%

10:14 AM EST

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To: Mohan Marette who wrote (38830)	4/23/1998 7:17:00 PM
From: Chuzzlewit	Read Replies (1) of 176387

Mohan, I'm not an accountant, but I'll try to the best of my understanding. New accounting rules require that when you get a deposit for services to be rendered (but not yet rendered) you debit the cash and credit an account called deferred revenues. The point is that this is not a liability in the usual sense, but rather, revenues that will be earned as the services are rendered. In that sense "deferred revenues" gives you a window to the future. It used to be that a lot of software houses would treat this situation as traditional revenues (i.e. earned) . Unfortunately, accounting for it in that way failed the test of reason. Look at BAANF to see the effect that this change in accounting had. TTFN, CTC

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