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Technology Stocks : Compaq
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To: rupert1 who wrote (53952)3/18/1999 2:49:00 PM
From: JDN  Read Replies (2) of 97611
 
Dear Victor: "prepayment" does NOT provide for a sale!!! Only the passage of TITLE allows a sale to be booked. Most companies policy is to pass title once the goods have been SHIPPED. That means that until the buyer receives the merchandise the risk of owning the asset (ie damage etc) lies in the hands of the shipper. ie CPQ cannot record a sale until it has transferred to others the risks of ownership. Now, if CPQ has a deal where they will store the inventory for the buyer but it is clearly owned by the buyer then a sale could be recorded but this is very rare. JDN
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