Accounting Rules Change in Palm's Favor (Apple's too)
 

Accounting Rules Change in Palm's Favor (Apple's too)



http://www.precentral.net/sites/prec.../palm-logo.jpgDid the multiple accounting methods put forth in Palm's latest Quarterly Financial Results leave your head spinning? Take heart, things are going to get a little bit simpler.
As expected by many, a rule change that Apple, Palm, and others were pushing for has been approved. Before today, Palm was required to account for the revenue and profits from the Palm Pre over two-years, this so that they would be allowed to offer free software upgrades over the life of the device.
Starting sometime in 2011, the Financial Accounting Standards Board will allow companies to account for the revenue and profits of devices like the Pre right away, instead of over the course of the two years. Actually, companies can start adopting the rule change right away and we wouldn't be surprised in the least to see Palm do just that.
Still awake? The bottom line is here is that soon divining the true effect of a quarter on Palm's bottom line will no longer be an exercise in alchemy, spreadsheets, and chicken entrails. Their actual finances shouldn't really change (outside any effect this change has on stock fluctuations) over the course of the life of the company, however, just how they're reported.


originally found here: