Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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 : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: Allen Benn who wrote (7927)	6/7/2000 12:28:00 PM
From: umbro	Read Replies (2) \| Respond to of 10309

Allen, thanks for your reply. A few questions/comments below: - on pre-paids vs. downstream royalties, your point about customers allocating pre-paids to their development budget as a way of lowering effective mfg. cost is a good point. As to whether royalties will increase as a percent of sales over time, it would seem that now that WIND reports the royalty figure, we can track that, and time will tell. - on the point of how WIND handles pre-paids, I'd assume there is no reason they couldn't declare the pre-paid royalties upon receipt (there is no obligation to deliver anything further, except the right to mfg. 'n' units, right?). Does the pro-rating simply smooth out the revenue curve? I did an analysis of WIND in a post about March or April of 1999, in which I imputed the royalties at about 28% for WIND at the time. If you can find the meesage# for that post, I'd like to read it. If you have the time to update the analysis, given WRS's current business, even better. The reason royalties currently run at 22% (not 20%) of total sales [...] At the current level of discussion, I don't think it is worth worrying over 2%. Back to the question of accounting for pre-paids: If the pre-paids are not immediately shown as revenue, when received, then where do the pre-paids show up? As some sort of 'intangible' on the balance sheet?