SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : How high will Microsoft fly?
MSFT 510.37+1.4%Nov 14 9:30 AM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: 16yearcycle who wrote (9486)7/22/1998 8:41:00 AM
From: Reginald Middleton  Read Replies (2) of 74651
 
<"The CFO Maffei clearly said in the conf call that it's mumbo jumbo to add back the defered revenues. They are defered for a good reason.">

If you read the piece I linked to a little earlier, I explained how this works. Deferred revenues are the equivalent of shareholder equity. You add back to profits any change (as in delta - both positive and negative) to deferred earnings. The earnings are deferred for a reason, and that reason is to offset unearned revenue. Since there are no stringent guidelines in the deferral process and we assume MSFT is an onging entity, we must deal in change of deferred amounts. If MSFT were to cease to function, customers would have a claim on those deferred funds that would be superior to that of shareholders and creditors. If you have Excel 97, I have a VBA app that reconciles net income for you and maps the revenus deferral change from year to year - adjusting earnings accordingly. If you don't have Excel 97, the article displays a list of formulas. It is for this reason (among many others) that I say earnings don't count for much. I was going to offer this article to SI for distribution, but they did not think it was appropriate for the SI crowd. If you think it is useful, mail the webmistress and let her know.

The entire deferral process in terms of valuation and performance is explained in detail at rcmfinancial.com
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News