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Non-Tech : Borders Group (BGP) -- Ignore unavailable to you. Want to Upgrade?

To: david thor who wrote (91)	1/9/1999 5:11:00 PM
From: dreydoc	Read Replies (1) \| Respond to of 411

>>Seriously, they're very convenient and I don't understand why they weren't included as income last quarter. Accountants, anyone? It just seemed like such conservative accounting.<< I'm not familiar with the book business but I suspect that they have variable profit margin across inventory. By convention, they don't want to relieve inventory or charge cost of sales on pooled dollar basis but want to use specific identification based on books going out the door with redemptions. Probably related to unit sales reporting back to book manuf's as well. Still it seems to me that this would be relatively immaterial to total sales. Sure you get a boost at the holidays, but to identify that as a contributor to shortfall in earnings is a stretch I think. What's all the anticipation about January 11 announcement? dd

To: david thor who wrote (91)	1/9/1999 9:06:00 PM
From: Catcher	Respond to of 411

would doubt they take cert income differently than barnes noble...lame excuse unless we hear it from barnes

To: david thor who wrote (91)	1/10/1999 8:39:00 AM
From: stokaholic	Read Replies (1) \| Respond to of 411

I used to be an accountant,until I realized that accounting is the only field where if you try to be creative, they put you in jail. I think you could go either way on the certificates thing--- on the one hand, the company has made a sale and, assuming they are not refundable, has earned $50 in revenue. However, this application would ultimately create a mismatch between revenues and costs. Think about it--I buy a gift cert for $50 in December, and BGP reports revenue in 4Q. I give the gift cert, and it is redeemed in February to buy 3 books on "Internet Investing for Dummies" or something like that. Now, BGP has a cost (recognizing the cost of the books sold) and no offsetting revenue. Ultimately, since BGP is in the business of selling books, I think the treatment they are using is probably for the best. One interesting question would be whether these certificates ever expire, because there would likely be some % not redeemed in their entirety, and so at some point, some additional earnings benefit will come via the sale of these certs.