Allen Bauer wrote:
Sorry, I have to call BS on this one...
This 'problem' only existed for a year once the accounting method changed. As a programmer, you should easily be able to figure out the paradigm.
At the beginning of the time, you folks went from 'booking all revenue' to only 'booking one-twelfth' of the revenue. However, a year later you would be booking 1/12th of the new revenue from that month, 1/12th of the revenue from the month before, 1/12th of the revenue from 2 months before, etc., so that the total revenue booked one year after the accounting transition would 'show' as the full value of revenue that was being booked monthly a year previously.
The only result that SOX has at this point (more than one year after you changed accounting methods) is to SLOW the impact of revenue changes. If you have a stupendously large month, that change will be seen more gradually -- but the good news is that so is a dip.
So, you're not dealing with any differences in income, all of this nonsense about 'measuring the health of the company' doesn't relate to the 'real' measure of the company -- i.e., how likely is it that you will retain your paying customers?
I've been on SA for a while now, but I'm beginning to regret it. I literally never even installed RAD Studio 2009, because there were so many issues to be worked out in it when it originally made the transition to Unicode. RAD Studio 2011 (or whatever it will be called) will very likely be the same -- there is no way I'm going to trust a complete re-write of the compiler before I see others spend several months 'wringing the bugs' out of the product, and the likelihood is that (as with 2009) they won't be fixed until the NEXT iteration of the product.
So, at this point, being an SA customer brings me no real benefit -- I actually feel very much like I'm gambling. And frankly, I am. I'm gambling that a release will come out within the time frame of my SA period, and I'm gambling that the release will actually be usable/useful.
Embarcadero really needs to revamp what SA means if they want to retain folks longer term (retain as customers of SA, not overall customers). Blaming all of this on SOX doesn't go over well...
David Erbas-White
> Wayne Niddery wrote: > > SOX has had a profound affect on all corporate accounting (public *and* > private). The primary one being that you cannot book revenue for a > product until it is delivered *in full* to the customer. As soon as you > release an update with a new "feature" then that triggers accounting > rules such that the "revenue" has to be recognized over the period of > time between the first sale and the update. It is *really* bad if > you've already booked the entire sale price as revenue. You now have to > go back and *restate* earnings if it crossed a quarterly boundary. > > Even if you have the cash in the bank, you cannot count it as real > revenue! Under these rules, you could have $2B in cash from sales in > the bank, yet are only able to account for 1/4 of it on your balance > sheet. Also, you cannot spend or otherwise *use* that money because it > isn't *operating capital*. You can only take your expenses out of the > booked revenue. This is the true measure of the health of a company; > can they "operate" profitably? IOW, after you account for all your > expenses against the booked revenue, is there anything left over as > profit? >