[Park Seward]

Originally Posted by Bill Denton

So, how would you calculate how many hammers you would have to replace in "X" years if you had no way of knowing how log "X" is? How would you calculate the "warranty return percentages" over an unknown period of time? How would you know how much of a "reserve" amount was needed? And what if you had received some bad information from your accountants, and had not been keeping any reserves at all?

Bill,

From what I have been able to read and listen to their accounting videos, it seems they were concerned with software releases and not warranty issues. They explained that since the software was active and the company was supplying bug fixes, they should spread the revenue over the time the software version was active and the customer was being supplied with updates and not book the entire revenue when the software was sold.

I think this is what all the past accounting issues were about and why they had so much work to do. They wanted to spread out the revenue from past sales.

And now with paid updates, they can book the total revenue of the sale when it occurs since we will pay for the updates. They don't need to hold much back.

At least this is what I have been able to understand.