Monday, January 15, 2007

Bizarre Government Accounting Rules

Many have probably heard that Sarbanes-Oxley Act is driving firms to list their shares on foreign stock markets and not on the US stock exchanges.

From an Apple representative on the show floor: so if you have a Core 2 Duo Macintosh, you have a card capable of 802.11b, g, and - surprise, surprise - n. (Well, apparently n draft 2, which may or may not be like the final ratified standard come 2008, but will be supported in multiple Apple products.) And Apple’s going to distribute software to let you unlock the n standard in that card, which offers superior bandwidth for all sorts of data, especially and including high-bitrate video. Great news, right?

I’m not going to claim to understand this next part, which really just makes no sense to me at all, but the claim Apple’s making is that it _can’t_ give you the 802.11n-unlocking software for free. The reason: the Core 2 Duo Macs weren’t advertised as 802.11n-ready, and a little law called the Sarbanes-Oxley Act supposedly prohibits Apple from giving away an unadvertised new feature for one of its products. Hence, said the Apple rep, the company’s not distributing new _features_ in Software Update any more, just _bug fixes._ Because of Sarbanes-Oxley. . . .

it’s about accounting. Because of the Act, the company believes that if it sells a product, then later adds a feature to that product, it can be held liable for improper accounting if it recognizes revenue from the product at the time of sale, given that it hasn’t finished delivering the product at that point. Ridiculous.

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