Siebel Systems (SEBL) - strong buy? Message Board

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Technology Stocks : Siebel Systems (SEBL) - strong buy?

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To: Shege Dambanza who wrote (1564)	5/18/1998 10:17:00 PM
From: Lee L.	Read Replies (2) of 6974

Software license revenue is recognized when all of the following criteria have been met: there is an executed license agreement, software has been shipped to the customer, no significant vendor obligations remain, the license fee is fixed and payable within twelve months and collection is deemed probable. All Siebel deals are consummated in an order letter. On that letter, the number of users, cost per user and payment terms are specified. The cost per user, however, is really immaterial. It's the total amount of the deal that matters. The order letter is a binding legal document. The date of the order letter is the same date used for revenue recognition. As I understand it second-hand, for large development projects like Nationwide, Siebel only recognizes the revenue once users are in production (even though they received lots of cash up front). For packaged software sales, I think that this common practice. Also, I was once contacted by Siebel's auditors to verify that a couple of my invoices reported by Siebel were correct.

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