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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: slacker711 who wrote (112606)	2/8/2002 1:55:38 PM
From: cfoe	Respond to of 152472

Is that how it would work? Essentially, yes.

To: slacker711 who wrote (112606)	2/8/2002 1:56:46 PM
From: Wyätt Gwyön	Respond to of 152472

i don't see why it has anything to do with timing. the up-front payment could be cash and/or equity, as could the "receivable" payment. all receivable means is that it is a payment QCOM has not collected yet. i don't think it says anything about the form in which the payment would be made.

To: slacker711 who wrote (112606)	2/8/2002 2:05:30 PM
From: Stu R	Respond to of 152472

Just to try and walk through an example. Say COM DEV was charged a $5 million dollar license fee. They gave $1 million in cash (booked as revenue) and an IOU for $4 million in stock (booked as receivables). They issue the stock a quarter later and the receivables dissapear and the other $4 million shows up as revenue. Is that how it would work? Very close. The $4million showed up as revenue at the same time the receivables were booked. Case one is $5 million paid in stock. $5 million is booked as revenue (under the old rules-without amortization). No cash is exchanged. Case two is $5 million not immediately paid and booked as a receivable. When the receivable is booked the revenue is booked at the same time. At a later date the company pays with stock instead of cash "removing the receivable" from the balance sheet. No cash is exchanged. It is the same transaction except for the timing of receipt of stock. The revenue is booked on the same date, both are non-cash transactions paid with company stock. The end result is the same. Hope that helps, Stu