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Technology Stocks : MSFT Internet Explorer vs. NSCP Navigator

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To: Reginald Middleton who wrote (3268)11/21/1996 3:00:00 AM
From: Gerald R. Lampton   of 24154
 
>By
>deferring revenues over a defined time period, those spikes are smoothed out and
>revenue appears to be more consistent.

What's the mechanism they are using to defer revenue recognition? Cash-based one quarter and accrual the next? Different recognition principles for different divisions? Is there some other revenue recognition principle being applied?
What's the underlying principle that makes it intellectually honest and differenciates it from other, less reputable companies who do the same thing and then have people accuse them of "accounting games"?

I'm not accusing Microsoft here of playing accounting games. I just want to understand what they are actually doing and why it is in everyone's best interest that they do it that way.
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