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Re: Sarbanes-Oxley again


2007-05-07 06:54:12 AM
delphi84
In article <XXXX@XXXXX.COM>, Wayne Niddery [TeamB]
says...
Quote
When govenrment starts charging
people for proclaiming their innocence, it is time to be very afraid.
Surely they charged her for influencing the value of the stock? They
charged her for the effect (potential or actual) of what she said, not
for what she said.
Had she admitted :guilt: she would have potentially faced the same
charge.
Would you then have said "when government starts charging
people who admit guilt, it is time to be very afraid." ?
When people start dissembling to support their position it is time to be
very doubtful of their position.
;)
--
Jolyon Smith
 
 

Re: Sarbanes-Oxley again

Jolyon Smith writes:
Quote

Surely they charged her for influencing the value of the stock? They
charged her for the effect (potential or actual) of what she said, not
for what she said.
So because what you say may have some affect on someone else's actions, you
should not be allowed to say it - even if it is to claim innocence of a
crime? Or is this only when a stock price might change? The idea that one
loses freedom of speech, merely for holding stock that *might* change in
price, is {*word*201}.
--
Wayne Niddery - Winwright, Inc (www.winwright.ca)
"Democracy, without the guarantee of liberty, is merely a method of
selecting tyrants." - Alan Nitikman
 

Re: Sarbanes-Oxley again

"Captain Jake" wrote
Quote
Blaming law and politics is not going to sway me when I know that all of
CodeGear's competitors operate under the same US Law Code,
"The law, in its majestic equality, forbids the rich as well as the poor to
sleep under bridges, to beg in the streets, and to steal bread."
Anatole France
If current readings of SOX make recognizing revenue difficult for roadmapped
products, that negatively impacts CodeGear in an absolute way. It simply has
to meet its own payroll as well as whatever financial obligations it has to
Borland, and its not likely that it has any way to do that without
immediately booking current sales. Unless it has a significant cash reserve
(which I very much tend to doubt), CodeGear has to be very very careful
about anything that might interfere with the revenue streams of its
developer tools--those are the only products they have, and virtually the
only income they have. Bottom line: if CodeGear were forced to defer
earnings from CDS sales as a result of a SOX ruling, it would likely mean
the immediate end of the company.
MS, by contrast, reportedly has about $29 billion in liquid reserve
(seattlepi.nwsource.com/business/309852_software02.html). Especially
with a new operating system on the market, I would be surprised if MS's CFO
weren't actively looking for ways /not/ to recognize revenues.
bobD
 

Re: Sarbanes-Oxley again

On May 7, 1:12 am, "Bob Dawson" <XXXX@XXXXX.COM>writes:
Quote
If current readings of SOX make recognizing revenue difficult for roadmapped
products, that negatively impacts CodeGear in an absolute way.
It simply has to meet its own payroll as well as whatever financial obligations it has to
Borland, and its not likely that it has any way to do that without
immediately booking current sales. Unless it has a significant cash reserve
(which I very much tend to doubt), CodeGear has to be very very careful
about anything that might interfere with the revenue streams of its
developer tools--those are the only products they have, and virtually the
only income they have.
Bottom line: if CodeGear were forced to defer
earnings from CDS sales as a result of a SOX ruling, it would likely mean
the immediate end of the company.
If things are that serious over CashFlow issues due to SOX/Revenue
recognition then why is the CodeGear wholly owned subsidiary of
Borland ( Which is what it is at the moment no matter how its spun )
still operating ? Surely better for Borland to auction off the IP to
any interested parties and close it down if that is indeed the case ?
 

Re: Sarbanes-Oxley again

Captain Jake writes:
Quote
It doesn't matter anyway. IMHO, the only VALID reason for not
releasing a road map that I have ever heard from Borland or CodeGear is
that their smaller size makes surprise a more important element of
success.
..and size is *not* a valid reason for having greater impact of other
implications? You can not have it both ways.
--
Dave Nottage [TeamB]
 

Re: Sarbanes-Oxley again

In article <463e6ee2$XXXX@XXXXX.COM>, Bob Dawson says...
Quote
"Captain Jake" wrote

>Blaming law and politics is not going to sway me when I know that all of
>CodeGear's competitors operate under the same US Law Code,

"The law, in its majestic equality, forbids the rich as well as the poor to
sleep under bridges, to beg in the streets, and to steal bread."
Anatole France

If current readings of SOX make recognizing revenue difficult for roadmapped
products, that negatively impacts CodeGear in an absolute way. It simply has
to meet its own payroll as well as whatever financial obligations it has to
Borland, and its not likely that it has any way to do that without
immediately booking current sales.
I don't see that this is any different to acompany that has lots of
invoices outstanding, but which has no cash in the bank to pay it's
staff.
Astride a white charger comes a saviour who will lend you the cash you
need, using your future invoice payments as security (in hopelessly over
simplified terms).
I should think that being able to offer cash in the bank as security
against a loan to tide you over until you can recognise that cash in the
bank should enable you to secure a favourable rate of interest on that
borrowing.
Sure, it means you have to "pay" to get at your own money, so there is a
"cost" involved.
I guess the question is whether that cost is (or is perceived to be)
more or less than the "cost" that nose-diving credibility is doing to
your business?
--
Jolyon Smith
 

Re: Sarbanes-Oxley again

On May 7, 2:14 am, "Dave Nottage [TeamB]" <XXXX@XXXXX.COM>
writes:
Quote
Captain Jake writes:
>It doesn't matter anyway. IMHO, the only VALID reason for not
>releasing a road map that I have ever heard from Borland or CodeGear is
>that their smaller size makes surprise a more important element of
>success.

..and size is *not* a valid reason for having greater impact of other
implications? You can not have it both ways.

--
Dave Nottage [TeamB]
Size of course has an impact in the subject at hand. However, its to a
limited extent relative. A Giant like MS ships a lot more product in a
quarter so if it has to defer revenue recognition the reduction in a
quarters results can look big and cause some stock price volatility as
a result. Yes they wont go out of business etc I agree. But the
response when anyone points to likes of MS etc issuing some basic
future product plans/roadmaps that they don't have to worry atall due
to their size is rather disingenuous.
 

Re: Sarbanes-Oxley again

"DerekUK" wrote
Quote

If things are that serious over CashFlow issues due to SOX/Revenue
recognition then why is the CodeGear wholly owned subsidiary of
Borland ( Which is what it is at the moment no matter how its spun )
still operating ? Surely better for Borland to auction off the IP to
any interested parties and close it down if that is indeed the case ?
Short term cash flow is related to profitability, but they're not the same
thing. I doubt that Borland set up CodeGear with a big enough financial
cushion to allow them to delay all revenue recognition for six months, let
alone the duration of a roadmap. That doesn't mean that current income--if
bookable--might not exceed current expense.
bobD
 

Re: Sarbanes-Oxley again

On May 7, 4:42 am, "Bob Dawson" <XXXX@XXXXX.COM>writes:
Quote
"DerekUK" wrote



>If things are that serious over CashFlow issues due to SOX/Revenue
>recognition then why is the CodeGear wholly owned subsidiary of
>Borland ( Which is what it is at the moment no matter how its spun )
>still operating ? Surely better for Borland to auction off the IP to
>any interested parties and close it down if that is indeed the case ?

Short term cash flow is related to profitability, but they're not the same
thing. I doubt that Borland set up CodeGear with a big enough financial
cushion to allow them to delay all revenue recognition for six months, let
alone the duration of a roadmap. That doesn't mean that current income--if
bookable--might not exceed current expense.

bobD
Still stand by what I said which was given in response to :-
Quote
Bottom line: if CodeGear were forced to defer
earnings from CDS sales as a result of a SOX ruling, it would likely mean
the immediate end of the company.
 

Re: Sarbanes-Oxley again

Seems someone has been asking about CodeGear and SOX elsewhere :-
www.sarbanes-oxley-forum.com/modules.php
 

Re: Sarbanes-Oxley again

In article <463ea23b$XXXX@XXXXX.COM>, XXXX@XXXXX.COM says...
Quote
"Jolyon Smith" wrote
>Sure, it means you have to "pay" to get at your own money, so
>there is a "cost" involved.

No quotation marks necessary--such a cost would be very real.

And we're not talking chump change here: most businesses operate with a
rolling line of working credit, but you're adding talking months of
additional interest on potentially CodeGear's entire revenue stream.
No - nobody has ever said that CodeGear would not be able to recognise ANY
revenue. aiui SOP-97 works by determining a :proportion: of revenue whose
recognition must be deferred.
What proportion in each case may vary, but it is unlikely to be 100% or
anywhere near it.
 

Re: Sarbanes-Oxley again

In article <463ea649$XXXX@XXXXX.COM>, Captain Jake writes:
Quote
I suppose anything is possible when it comes to that chicanery known as
"Accounting".
Old joke:
Q. "How do you choose an accountant?"
A. "Call each candidate in in turn and ask them what 2+2 makes. Pick the
one who says "What answer were you looking for?""
We take 50% of our income in maintenance subscriptions and account for
them a on a conservative basis (1 x 17.5%. 11 x 7.5%). It hurts the P&L
somewhat (not that this really matters as we are a private company with no
borrowings) but also defers a significant amount of tax for a year.
--
Tony Bryer SDA UK 'Software to build on' www.sda.co.uk
Software Industry Conference 2007 sponsor www.sic.org
Hyatt TechCenter, Denver, July 12-14, 2007
 

Re: Sarbanes-Oxley again

"Jolyon Smith" wrote
Quote

What proportion in each case may vary, but it is unlikely to be
100% or anywhere near it.
I'm glad you're so solvent that the thought of your main revenue stream
suddenly becoming subject to apportionment over some unknown future span
seems inconsequential.
bobD
 

Re: Sarbanes-Oxley again

Richard Grossman writes:
Quote
Proper accounting, such as deferring revenue when it is based on future
expenses, is required even if the CEO & the CFO are the only ones who know.
But that is not what's being discussed. Future expenses have /*nothing*/
to do with the revenue recognition issues being discussed. The subject
is about revenues being deferred if customers have a reasonable
expectation of receiving future upgrades as part of a current purchase.
Customers cannot reasonably come to that conclusion with no public
information to support it, therefore keeping the roadmap private can
affect how the accounting is being done (while still being legal and
proper accounting).
Rich
 

Re: Sarbanes-Oxley again

In article <463f26aa$XXXX@XXXXX.COM>, Bob Dawson says...
Quote
"Jolyon Smith" wrote
>
>What proportion in each case may vary, but it is unlikely to be
>100% or anywhere near it.

I'm glad you're so solvent that the thought of your main revenue stream
suddenly becoming subject to apportionment over some unknown future span
seems inconsequential.
That all depends doesn't it. If it is 1% of that stream that's
apportioned, then it is utterly inconsequential. If it is 99% then of
course it is consequential.
But I believe any apportionment would be nearer 1% than 99%
The time span is not unknown - it is determined by any forward looking
statements and your ability to deliver on the expectations you set,
which seems pretty reasonable.
And let's not forget that CodeGear themselves are wholeheartedly in
favour of apportioning revenue recognition, in the form of SA.
So let's not get our knickers in a knot over the principle of the thing,
the devil (or indeed the saviour) is in the :detail:.
--
Jolyon Smith