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Microsoft reports $22.6B in Q4 revenue

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Re: Microsoft reports $22.6B in Q4 revenue

#21

Post by droshelovich »

TheSpiceIsLife wrote: post #17
droshelovich wrote: post #15

Earlier quoted context omitted.

GAAP is basically a huge bundle of compromises between corporations and the FASB. In reality, "revenue" and "income" don't really have rigourous definitions. Quarterly figures are also often adjusted in subsequent periods. Unfortunately, many websites simply gloss over this fact and just report the stated numbers.

As noted in my other comment, I had to look up what GAAP meant. What's the FASB ?

To complicate matters further there is US GAAP, UK GAAP, German GAAP, etc. The tl;dr of the earlier comment is that accounting reports don't usually reflect economic realities of large corporations.

There are several companies/methodologies that significantly adjust public filings to reflect economic realities: [1] https://www.credit-suisse.com/sites/holt/en.html [2] http://finance.wharton.upenn.edu/~acmack/Chapter_12_app.pdf

Re: Microsoft reports $22.6B in Q4 revenue

#22

Post by droshelovich »

TheSpiceIsLife wrote: post #16
chx wrote: post #9

I absolutely hate these confusing words. It is alongside of "surname" and "last name" -- why can't you just use "family name" and "given name". While I understand an investor report needs to be precise the articles about it needs to use terms people understand. Like "this is how much money came in the doors" -- aka. income. I believe the word "revenue" is used for what a layperson would call "income" and "income" is…

Right. I had to look up what GAAP means so I could understand non-GAAP. GAAP - Generally Accepted Accounting Principles So what then is non-GAAP? But lack of standardization in these calculations, plus the potential for creative accounting, make it difficult to draw relevant comparisons among companies or draw meaningful conclusions from these statistics. [1] Riiiiiiight. It the article was from a financially oriente…

In this case, "Non-GAAP" means an earnings/revenue figure that the company produced itself. Companies usually claim this reflects economic reality but keep in mind they are free to cook up whatever numbers they want. GAAP would mean figures that adhere to general accounting rules, which independent auditors help confirm.

Generally, "Non-GAAP" can mean either IFRS or Cash Basis Accounting

Basically:

GAAP - Generally Accepted Accounting Principles = the way large corporations in the US have to account for things (assets, liabilities, equity, earnings, cash flows, etc.) --> Accruals

IFRS - International Financial Reporting Standards = how European companies account for things --> Accruals

Cash Basis Accounting = the way small businesses usually account for things

Cash Basis Accounting vs. Accrual Accounting (GAAP/IFRS/etc.)

* Cash Basis --> expenses and revenues directly match cash flows, I buy a machine that lasts 5 years today and expense the whole purchase price today

* Accrual Accounting --> expenses are recorded when "incurred" and revenues when "earned", I buy a machine that lasts 5 years today and expense the purchase price over 5 years

Individual standards (IFRS/GAAP, etc.) define these soft terms: incurred, earned, assets, debt, equity, other income, etc.

Re: Microsoft reports $22.6B in Q4 revenue

#24

Post by JumpCrisscross »

julsimon wrote: post #6

Not according to GAAP rules... http://www.zerohedge.com/news/2016-07-19/microsoft-misses-ga...

> adds back such items as Windows 10 deferrals to revenue

What does this mean? Are Microsoft counting people who haven't upgraded as if they have upgraded?

Re: Microsoft reports $22.6B in Q4 revenue

#25

Post by mseebach »

droshelovich wrote: post #21
TheSpiceIsLife wrote: post #17

Earlier quoted context omitted.

As noted in my other comment, I had to look up what GAAP meant. What's the FASB ?

To complicate matters further there is US GAAP, UK GAAP, German GAAP, etc. The tl;dr of the earlier comment is that accounting reports don't usually reflect economic realities of large corporations. There are several companies/methodologies that significantly adjust public filings to reflect economic realities: [1] https://www.credit-suisse.com/sites/holt/en.html [2] http://finance.wharton.upenn.edu/~acmack/Chapter_1…

I think it's more a case of there not being any singular knowable economic reality of a sufficiently large organisation -- so you agree on some principles that are at least somewhat consistent and comparable over time and between (similar) organisations.

Re: Microsoft reports $22.6B in Q4 revenue

#26

Post by pbhjpbhj »

0xmohit wrote: post #12
sdrothrock wrote: post #8

Earlier quoted context omitted.

> Not sure if this qualifies as an achievement. Too many questions would perhaps suggest that things aren't quite obvious. > Wish I had a Windows box to play around and see what Cortana looks like. A variant of Clippy? Your comment suggests that you don't know what Cortana is, so I'm not sure how you're coming to the conclusion that "Too many questions would perhaps suggest that things aren't quite obvious." Cortana…

I keep forgetting that, in today's world, people would even need to ask Siri or Cortana whether they are thirsty.

OT: It's a complete aside but humour me.

IME people can mistake thirst for hunger - one thinks one is very hungry but drinking some water (or other drink) and the feeling of hunger subsides, not scientific but there seems to be something in it. I wonder if there is some test for an optimum hydration level that a computer could do (visually?) or indeed if in a few decades we'll be monitored so closely in our actions in our homes (or at least those of us who are rich will) that Son-of-Siri will be telling us we should have a drink.

Probably Microsoft/Apple/Google/Buy&Large will be getting back-room deals to get their intelligent companions to order specific brands of drink for us and make recommendations when we're not quite thirsty that we need a drink "how about a Buy&Large cola"!!?

Re: Microsoft reports $22.6B in Q4 revenue

#27

Post by forgetsusername »

JumpCrisscross wrote: post #24
julsimon wrote: post #6

Not according to GAAP rules... http://www.zerohedge.com/news/2016-07-19/microsoft-misses-ga...

> adds back such items as Windows 10 deferrals to revenue What does this mean? Are Microsoft counting people who haven't upgraded as if they have upgraded?

>What does this mean?

It sounds like they are deferring some of the revenue from licenses sold with the intention of booking it over the life of the OS, as "free" updates are released.

Re: Microsoft reports $22.6B in Q4 revenue

#28

Post by forgetsusername »

ProfChronos wrote: post #19

It is weird to see Techcrunch faking the Wall Street Journal or Bloomberg with GAAP, "Street" and earnings per share expressions. Really not what I expect from TC... I can't help but think that good old days when TC used to explore new ideas and technologies are gone. Today almost all their writers just post update about a funding round, a developer conference or a new product feature. I wish I could get more in-dept…

>I can't help but think that good old days when TC

I honestly can't remember what the "good old days" of TC even looked like. MG Siegler writing fawning pieces about Apple? The latest Arrington drama?

I came for the comment section. When they integrated Facebook, I never went back.

Re: Microsoft reports $22.6B in Q4 revenue

#29

Post by Dwolb »

droshelovich wrote: post #15
chx wrote: post #9

I absolutely hate these confusing words. It is alongside of "surname" and "last name" -- why can't you just use "family name" and "given name". While I understand an investor report needs to be precise the articles about it needs to use terms people understand. Like "this is how much money came in the doors" -- aka. income. I believe the word "revenue" is used for what a layperson would call "income" and "income" is…

GAAP is basically a huge bundle of compromises between corporations and the FASB. In reality, "revenue" and "income" don't really have rigourous definitions. Quarterly figures are also often adjusted in subsequent periods. Unfortunately, many websites simply gloss over this fact and just report the stated numbers.

I had a financial accounting professor who would recount the quote, "Profit is an opinion, but cash is a reality."

The 10k's we would go over took a lot of analysis to understand financially and operationally if the company is in good shape based on the stated numbers.

Re: Microsoft reports $22.6B in Q4 revenue

#30

Post by jsjohnst »

pbhjpbhj wrote: post #26
0xmohit wrote: post #12

Earlier quoted context omitted.

I keep forgetting that, in today's world, people would even need to ask Siri or Cortana whether they are thirsty.

OT: It's a complete aside but humour me. IME people can mistake thirst for hunger - one thinks one is very hungry but drinking some water (or other drink) and the feeling of hunger subsides, not scientific but there seems to be something in it. I wonder if there is some test for an optimum hydration level that a computer could do (visually?) or indeed if in a few decades we'll be monitored so closely in our actions i…

Nice Wall•E reference there
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