SOP 97-2 is the accounting standard that requires Apple to
recognize iPhone revenues and profits over a 24-month period.
The basic concept is that because Apple offers free software updates on the device, it has to recognize the revenues and costs over the life of the hardware.
After intense lobbying by several technology companies, however, FASB agreed to review the rule. The EITF (Emerging Issues Task Force), which is part of FASB, effectively reversed the rule in a meeting yesterday. At this point the new rule is a draft rule, but it should receive final approval in the next few weeks.
The new rule will allow Apple to recognize the iPhone hardware revenue and profit at the point of sale, while an estimated value for the software will be recognized over the life of the device.