Standards Board Approves Changes to Subscription Revenue Accounting

[mccldwll]

followup, from Gene Munster's note:

"Before yesterday's ruling, any product that offered free upgrades to software and services installed on a device like an iPhone required subscription accounting (revenue deferred over 8 quarters in the case of the iPhone and Apple TV). However, the vast majority of the value of the device was realized at the time of purchase. While the value at the time of purchase as a percentage of the purchase price is debatable, we believe about 90% of the value of an iPhone is realized at the time of purchase. Under the previous rules, Apple was only allowed to recognize 12.5% (1/8th) of the revenue from each sale; under the new rules, the percentage will be decided on a case-by-case basis for each given product."

 

[twoodcc]

i think this will be good for apple's stock price. also, what subscriptions does the apple tv have?

 

[mccldwll]

i think this will be good for apple's stock price. also, what subscriptions does the apple tv have?

Actually has nothing to do with "subscriptions"--only that significant firmware updates are contemplated when product is sold which will substantially improve function, and which would require charging for if deferral "subscription accounting" not utilized,.