Palm WebOS: Subscription Accounting
| by PalmWebOS.org on March 18th, 2009 |
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In my infinite quest to find every bit of Palm WebOS and Palm Pre news on the planet, I came across a Palm document marked “confidential” that illustrates to investors how the company will handle accounting for Palm Pre and other WebOS related revenue. This probably isn’t of interest unless you’re a Palm fan who also happens to be an accountant, but what the heck… I was excited to find it.
According to the document, all revenue and expenses for the Palm Pre will be distributed across 24 months, essentially spreading out the required 2-year contract/device cost evenly over that time. Meanwhile, sales of the old Palm OS products such as the Centro, Treo and other PDAs will be recognized immediately. These measures are applied only to Palm’s accounting records and the company clearly and repeatedly states it will NOT effect cash flow. I assume the goal is to portray stable and consistent earnings and growth while maintaining a healthy amount of cash from the immediate boom of the Pre.
You can download the PDF here.
1. bward wrote on March 19, 2009
Ah, but this is significant! The whole reason for doing this is that “Palm plans to periodically provide new software features free of charge to customers”, which implies ongoing R&D and improvements to the phone. So it can only get BETTER!
2. jeff wrote on December 13, 2009
The palm is just a good phone I don’t care about the subscription info.