Apple Receives Permission to Drop Subscription-Based Accounting For iPhone Revenues
It’s not the most exciting thing in the world, but it’s relevant. Per Macworld, Apple has received permission by the Financial Accounting Standards Board to move beyond previous accounting regulations which required Apple to recognize revenue from the iPhone and Apple TV over the length of their two-year product lifetimes, since the company had promised to roll out new features via software updates. The new rules allow Apple to adjust the percentage realized at sale to a more accurate level. The change could also mean an end to charges for iPod touch software updates.
Although this doesn’t alter Apple’s bottom line, it does offer the company even higher numbers to boast about in its quarterly financial conference calls and at CFO Peter Oppenheimer’s weekly financial reporting brown bag lunch.
Some have speculated that this will raise Apple’s stock price, which seems pretty likely—at least one analyst has already raised his targets for Apple’s earning per share over the next couple years. The new rules aren’t required until December 2010, but Apple could adopt them as early as the beginning of its new fiscal year, which is set to begin next week.