Insightful analysis and commentary for the US and global equity investor
Contributors: Douglas McIntyre Jon C. Ogg

Previous Posts

Wednesday, October 25, 2006

Microsoft: The Accountants Seize Mr. Softy By The Neck

Accountants have infiltrated Microsoft. In the basement they found the new program to offer coupons for people who buy PCs and want to upgrade to Vista, the new operating system. It makes sense. A very good marketing program. Let no buyer be left behind. Vista for all.

The some fellow with a green eyeshade had a look. His view was that Microsoft could not give out those coupons and take them as sales for the new system. Microsoft could only show the sales once the Vista software was actually put into the hands of buyers. The coupon was no proxy for the sale.

The deferral from fiscal Q2 to fiscal Q3 will be $1.5 billion. Not chicken feed. Full year results will not be affected. That's good. Sort of.

The troubling thing about all of this is that the accounting information came out after news of the coupon promotion. At a company as big as Microsoft, some junior accountant should not walk into Mr. Ballmer's office after that fact and tell him "opps".

Douglas A. McIntyre can be reached at He does not write about companies where he owns securities.

Powered by Blogger