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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: Eleder2020 who wrote (18969)	10/29/1998 9:49:00 PM
From: Kerry Lee	Respond to of 29386

The accounting of the Inrange $7 million certainly took me by surprise based on what I was hearing in the past month.. My latest understanding is that there was ALOT of internal discussion on how to recognize the $7 million..The best case scenerio is that they would have recognized $2.2 million in Q3 ( $3.0 M minus $800K value of warrants ) since Inrange has already received the bulk of the intellectual property. I believe that the reason why they were forced to use the entire 5 year contract period is because they are obligated to give Inrange future updates as Ancor's ASIC is updated periodically. The new SEC rules force revenue to be recognized over time accordingly where the seller is contractually obligated to provide more work ( eg software update ) over time..See latest quarterly results/press release from Netspeak ( NSPK ) for an example of where NSPK received a $2-3 million order from Motorola BUT could not recognize the revenue in the same quarter. At the end of the day, Ancor and its new auditors KPMG Peat Marwick decided to take the most conservative revenue recognition policy in order to avoid the death knell of re-stating financial results at some later date. Some shareholders might prefer to see the return of Lee Lewis so he can "sell" some more WIP to his contract manufacturer <g>.