Two things have become readily apparent to me while sifting through the 9 pages of this topic.
1. Many people have a very difficult time understanding accounting and GAAP
2. Educated and respectful reasons for the charge have fallen on deaf ears
The reasons sighted for the charge (namely, revenue recognition pertaining to GAAP) are absolutely reasonable and correct. By enabling this substantial capability that was NOT advertised or implied, they admit that the product that was delivered was incomplete. According to GAAP, the revenue should be deferred until the product is complete. Apple obviously didn't do this. Companies and shareholders hate restatements. So charge a nominal fee and be done with it.
Apple did not do anything dishonest or out of the ordinary. Apple is complying with GAAP.
I completely agree with those who have stated that Apple would rather not have to charge it's customers for this. Apple is breaking even on this transaction at best.
I cannot understand the argument that Apple should charge and then issue a rebate. Please tell me why Apple should incur a cost to enable a substantial feature upgrade that you DID NOT PAY FOR. You paid for a computer with b/g capabilities and that is EXACTLY what was delivered to you. You are not being forced to upgrade, and this upgrade in no way reduces the capabilities that were promised to you for the fee that you paid.
Furthermore, Apple's conduct would not be considered unusual even if the company wasn't compelled by accounting standards to charge. Automobile manufacturers frequently increase the performance capabilities of their automobiles after several years to offer consumers new features and/or a more compelling reason to upgrade. These power increases are often achieved through programing changes in the engine's electronic control module (ECM). Was the prior model year capable of this better performance? Sure, but maybe the software changes (and required EPA testing) weren't quite ready for the prior model. Do automobile manufacturers make this "upgrade" available to customers who purchased an older model? NO.
Apple could have never released this upgrade and you would have been forced to do one of two things: create the drivers yourself (your time is worth money, believe it or not), or buy an add-on card--both of which would likely cost you more than $2. This was the more generous (and pro-consumer) approach. Apple is a business, Apple is not your friend. People need to realize this. This is not to say that consumers should not be outraged when a company engages in blantant anti-consumer behavior--it's just that this doesn't qualify as one of those instances.
Now to the quotes from the accountant and FASB member. You are aware that the question asked influences the response given, correct? Accounting is based on guidelines, precedent, and conservatism (not necessarily in that order). Generally Accepted Accounting Principles are just that--generally accepted. They provide businesses with recommended guidelines and approaches (though public companies are required to conform to GAAP). They do not provide a textbook explanation of every possible business scenario. As such, they are open to interpretation. Enter precedent. Were we ever in a similar situation? If so, how did we approach it? If not illegal or unethical, handle this situation in the same or similar manner. Never been in this situation before? Tread lightly. The principle of conservatism (accounting-wise, not political - haha) dictates that given two or more approaches, select the option to provides the least amount of risk. Is this option more cautious than necessary? Perhaps. Dealing with an SEC investigation isn't exactly a pleasant experience, however. Apple has had a recent run-in with the SEC. When you're under the microscope, you tend to be more cautious.
Sorry for the long post. Responding to 9 pages of comments takes a while.
