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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year -- Ignore unavailable to you. Want to Upgrade?

To: terracin who wrote (1484)	7/20/1998 7:37:00 AM
From: John Carragher	Read Replies (1) \| Respond to of 4509

more negative words on Baan excerpt from wsj In a research report Friday, Salomon Smith Barney analyst Neil Herman noted that Baan in the 6-K also restated around $22 million of deferred revenues as "long-term deferred revenues," meaning the company doesn't expect to count this as actual revenue for more than 12 months. Baan said it already has received payment for these contracts from a third-party financier, and although software regulations won't allow it to recognize the revenue because it wasn't paid directly, it still has to account for the cash on its balance sheet. Mr. Herman also noted that Baan increased the costs deferred for software development by $3 million to $49.7 million. While software companies may recognize development costs over long periods, Mr. Herman said Baan's deferred total is high by industry standards. That suggests Baan's profitability is weaker than it seems, because those costs will have to be recognized at some point. Baan executives didn't return calls seeking comment on how Baan defers development costs.