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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium -- Ignore unavailable to you. Want to Upgrade?

To: cabernetfranck who wrote (67632)	1/26/2000 6:03:00 PM
From: swisstrader	Respond to of 108040

Yes, they get paid, but this is not at the heart of the issue here...the question originally posed by Mogul was why don't they RECOGNIZE REVENUE when they charge his credit card and that this was a Michael Dell decision...and the simple answer is NO!!, this is an AICPA and FASB requirement that says not until the product has shipped can you recognize revenue...I know M. Dell thinks he is more powerful than Arthur Levitt, I think otherwise (at least wrt accounting)...I know, I know, the SEC does not equal the AICPA!

To: cabernetfranck who wrote (67632)	1/26/2000 6:04:00 PM
From: WhatsUpWithThat	Read Replies (1) \| Respond to of 108040

They get paid often before they pay their suppliers; that's one of their successes, managing their cash flow. But in accounting terms, income statement terms, payment and revenue recognition aren't equal: you can get paid in advance but not be able to recognize revenue until GAAP says you can. The money sits on your balance sheet as a liability, in essence, a debt you owe, to offset the cash asset....cause if you never ship the product, you have to send back the cash, right? WUWT