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Gold/Mining/Energy : Jetform-FORM
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To: RMP who wrote (349)10/27/1998 12:32:00 PM
From: Midas  Read Replies (1) of 530
 
This seems to be a mixture of unfair and fair comment. As regards
recognizing consulting revenue only when it is billed, for any
long term contract which is billable on completion, you have to
account for work in progress somehow. To not do so would certainly
distort the accounts because you would have the costs but no matching
sales revenue if you didn't include the revenue until it was billed, and as Jeff McMullen apparently said, legally you probably have to do it.

As regards the term receivables from software licensing, I agree
their approach is not particular conservative.However I don't believe it has changed over time - they always have been sloppy in that
regard. The recent increase in long-term accounts receivable may
simply be because of the size of recent deals, and may not represent any change in policy.

The treatment of "sold" receivables doesn't seem particularly
unusual or worrying. But the excessive "write off of in process
r&d" following the delrina forms acquistion from Symantec may be
fair comment.

In summary, a useful analysis, but a lot of software companies
are just as cavalier in their accounting. I don't think there is
a great deal to worry about here, and most of it was pretty obvious
from their published accounts so it isn't new news.
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