Text 15842, 213 rader
Skriven 2007-02-03 20:17:22 av Ellen K. (1:379/45)
Ärende: Re: Accountants Say Apple's $1.99 802.11n Tax is Bogus
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From: Ellen K. <72322.1016@compuserve.com>

They didn't have to charge for it at all.

From a long-term perspective, doing this costs them way more than it brings
in... Haven't they ever heard of lifetime customer value?  This is a
particularly important concept for an outfit like Apple which relies heavily on
its customers' PERCEPTION that it is a better product and a better company than
the competition.

On Mon, 22 Jan 2007 18:44:56 -0500, "Rich Gauszka"
<gauszka@dontspamhotmail.com> wrote in message <45b54f8a@w3.nls.net>:

>http://gizmodo.com/gadgets/wireless/accountants-say-apples-199-80211n-tax-is-b
ogus-230538.php
>Remember Apple's $1.99 charge to update current laptops to 802.11n? Well,
>according to Lynn Turner, former chief accountant of the Securities and
>Exchange Commission, "[generally accepted accounting principles] doesn't
>require you to charge squat."
>
>She adds, "You charge whatever you want. GAAP doesn't even remotely address
>whether or not you charge for a significant functionality change. GAAP
>establishes what the proper accounting is, based on what you did or didn't
>charge for it."
>
>Despite this, Apple still maintains that if they gave away the 802.11n patch
>for free, their auditors would have required a revenue restatement, which
>may in turn cause...*yawn* sorry, we just fell asleep writing this sentence.
>Suffice it to say, Apple still thinks charging you two bones to activate
>802.11n is a good idea, even if top tier accountants say they're not
>obligated to. -
>
>http://users1.wsj.com/lmda/do/checkLogin?mg=wsj-users1&url=http%3A%2F%2Fonline
.wsj.com%2Farticle%2FSB116925153861582055.html%3Fmod%3Dhome_whats_news_us
>
>Apple Inc. recently told some customers they would have to pay $1.99 to
>download a software enhancement that enables a wireless-networking
>technology already included on some of its computers.
>
>Apple's reason: Accounting rules forced it to make customers foot the bill
>for the enhancement.
>
>That's an excuse, counter accounting experts and officials at the body that
>sets accounting rules, known as generally accepted accounting principles, or
>GAAP, for public and private companies. Rather, Apple is choosing to make
>customers pay so that it receives a particular accounting treatment it
>considers most favorable to it, they say.
>
>"GAAP doesn't require you
>
>
>
>"mike" <mike@barkto.com> wrote in message
>news:f087r2lhbc77jutb4sigkhhsll53rjip7o@4ax.com...
>> On Fri, 19 Jan 2007 19:12:21 -0500, "Rich Gauszka"
>> <gauszka@dontspamhotmail.com> wrote:
>>
>>>I don't understand that explanation -  Has Microsoft been in violation of
>>>Sarbanes-Oxley Act when they've added free features  ( Windows Defender )
>>>to
>>>XP?
>>
>>
>> http://news.com.com/2100-1044_3-6151790.html
>>
>> ===
>> Apple's explanation of a planned Wi-Fi upgrade fee has its roots in
>> obscure accounting rules that tell companies how to book sales of future
>> product upgrades.
>>
>> Apple said Thursday that it plans to charge customers $1.99 for a
>> software download that enables the 802.11n Wi-Fi technology currently
>> present in almost all MacBooks and MacBook Pros with Intel's Core 2 Duo
>> processor. The company says accounting rules known as generally accepted
>> accounting principles (GAAP) force it to ask for money for the download.
>>
>> "During the past several months Apple has shipped some Macs with the
>> hardware to support 802.11n, but the draft of the 802.11n specification
>> was not complete enough to create the required software," Apple
>> spokeswoman Lynn Fox said in an e-mail to CNET News.com. "Now that the
>> draft specification is complete, we are ready to distribute the software
>> to make the 802.11n hardware in these Macs come to life."
>>
>> But because the company has already recognized all the revenue from the
>> sales of those computers, it has to now charge customers at least a
>> nominal fee in order to establish the value of its software upgrade and
>> satisfy an obscure accounting regulation known as SOP 97-2, said Fox.
>>
>> Apple didn't have to do it this way, say accounting experts. But the
>> company most likely faced difficult choices in relation to the upgrade:
>> It could have held off on shipping the new Macs until the upgrade
>> software was ready. It could have skipped the 802.11n capabilities
>> altogether. Or it could have deferred revenue from the new Macs until
>> the software was ready--all unlikely and unpalatable options.
>>
>> Hence, the $1.99 fee.
>>
>> Of course, back when the Macs first shipped, Apple could have told
>> customers that the upgrade cost was coming and avoided customer backlash
>> over the surprise fee, but that didn't happen either.
>>
>> "To be certain, GAAP does not require companies to charge customers,"
>> said Gerard Carney, a spokesman for the Financial Accounting Standards
>> Board (FASB), which updates and maintains GAAP standards for accounting.
>> "Further, GAAP does not tell companies how to run their business," he
>> wrote in an e-mail.
>>
>> And now, for the tricky part...
>> The 802.11n Wi-Fi standard delivers faster wireless connection speeds
>> and greater network range. It has been delayed a few times, but the
>> Wi-Fi Alliance, a group of companies charged with managing the standard,
>> is getting ready to certify products based on the specification. Apple
>> announced at its recent Macworld Expo in San Francisco that it would
>> start shipping a new 802.11n Airport Extreme Base Station and the
>> upgrade software for $179 in February, around the same time it will ship
>> its Apple TV product, which also has an 802.11n chip.
>>
>> Apple began selling MacBook Pro notebooks with Intel's Core 2 Duo
>> processor in September, later adding that chip to MacBooks and iMacs.
>> However, the company also included 802.11n chips in almost all of those
>> systems without telling buyers, Apple CEO Steve Jobs revealed at
>> Macworld last week.
>>
>> Here comes the tricky part: under accounting regulations developed over
>> the last several years, when companies sell a product with multiple
>> pieces that are delivered at different times, they must determine the
>> separate value of each piece of that product, accounting experts say.
>> And the company can only record the revenue associated with a specific
>> piece when it is delivered to the customer.
>>
>> This is a very common practice in many industries, said Ryan LaFond,
>> assistant professor for accounting at the Massachusetts Institute of
>> Technology's Sloan School of Business. For example, magazines receive
>> all the money for a full year's subscription at the time the
>> subscription is purchased, but they only record that as revenue as each
>> issue is delivered, deferring the remaining balance into a liability
>> account called unearned revenue.
>>
>> But magazine readers purchase a subscription knowing they'll get an
>> issue every week or month, which establishes the value of each issue and
>> lets the accountants know how much money to recognize as revenue each
>> month.
>>
>> In order to figure out how much revenue can be booked up front,
>> companies need what's called "vendor-specific objective evidence" of the
>> value of the separate pieces of software. In other words, they need to
>> prove how much each piece of software would be worth if it was sold
>> separately, as opposed to how much it's worth in a package deal with
>> other pieces of software.
>>
>> The problem is you can't prove what some things are worth until you sell
>> them. What's the value of a software upgrade to 802.11n on the open
>> market? Apple isn't going to let any other company sell software that
>> would upgrade a piece of its hardware, making it almost impossible to
>> establish a market value for that software.
>>
>> That means a company in this situation would have to defer all the
>> revenue associated with the product until it can establish the value of
>> the Wi-Fi upgrade, or until it delivers the complete set of software,
>> said Brett Trueman, a professor of accounting with the Anderson Business
>> School at the University of California at Los Angeles. So, Apple would
>> have had to defer all the revenue for Macs sold with the 802.11n chips
>> from September until it delivers the upgrade in February, and that's not
>> a realistic option.
>>
>> So now, Apple has to establish a value for the Wi-Fi upgrade in order to
>> satisfy the requirement to separately account for the different pieces
>> of software. One easy way to do that is to charge people for it.
>>
>> There's absolutely nothing in the GAAP requirements that says Apple must
>> charge its customers for that software upgrade. The only requirement
>> imposed by GAAP is that Apple must account for the separate value of the
>> 802.11n capability, said MIT's LaFond. It can do this by creating a
>> value at the time of purchase or it can wait until it delivers that
>> capability to record all the revenue associated with the product.
>> Now on News.com:
>> Lobby bill spares political bloggers
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>> Photos: A first look inside Boeing's new 747
>> Extra: Two hip-hop producers in copyright trouble
>>
>> Another option, if the company had wanted to keep the 802.11n
>> capabilities secret, is to create a "new arrangement" with the customer.
>> Apple sold the customer a notebook in September, and is now selling the
>> customer 802.11n capabilities for that notebook. These are two separate
>> transactions that satisfy the need to account for the undelivered
>> 802.11n capability as well as Apple's desire to book all the revenue for
>> the notebook up front and keep the use of the 802.11n chip a secret.
>>
>> Any of those options would satisfy Apple's need to account for the
>> separate delivery times for the Macs and the 802.11n capabilities,
>> according to several experts interviewed for this article. But simply
>> blaming the fee on GAAP, or on the Sarbanes-Oxley regulations as some
>> rumors have suggested, does not tell the full story.
>>
>> "If I'm a company, and I want to give my customer something, GAAP isn't
>> going to prevent you from doing that," LaFond said. But at a time when
>> Apple's accounting practices are under significant scrutiny from
>> regulators looking into the company's stock-options backdating
>> practices, the company has to be extra careful about following the
>> proper procedures while keeping financial analysts happy with strong
>> earnings reports.
>> ===
>>
>>
>> I am sure that multiple accountants will have multiple opinions.
>> However, I also suspect that Apple is being overly cautious here.
>>
>>  /m
>

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