Microsoft reports $22.6B in Q4 revenue

It might mean the opposite.

GAAP rulea may dictate they book the revenue over the life of the OS to better match liabilities in the form of updates. MSFT want to book all the revenue now as an "economic reality".

It sounds like they're also claiming restructurings of their phone hardware division was a "one time charge" and removing those expenses, again, to better represent the "economic reality".

That is the standard definition for accounting and has been that way for a while:

Persuasive evidence of an arrangement exists Delivery has occurred or services have been rendered The seller's price to the buyer is fixed or determinable Collectibility is reasonably assured.

Stock compensation doesn't make it not an expense. It is coming from somewhere. It is coming from the equity holders pockets therefore it is a real cost.

The basic definition is Assets=Liability+Equity.

So rewriting it E=A-L

If you you pay a person with cash: E-C=A-C-L

When you pay person with equity:

E-X where X is equity you are losing in both cases they are equivalent. So stock option are not free and need to be treated as an expense.

Revenue deferral is not strange. It probably is a company has prepaid for licenses. Licenses can't be counted as revenue until it is delivered to them. However the cash can be collected early.

There's a lot more to finance than "evil bankers"

> This belief that Wall Street is always correct is exactly what caused the previous economic crash.

This is the easy over-simplification that makes for a convenient blame-game.

> Speculators don't care about a correct investment decision is about riding the trends

Speculators != Investors.

> If people are buying, it doesn't matter if you don't agree .. you have to buy as well it works as a hedge.

No. If other people are buying, you can sit there and do absolutely nothing.

> btw, don't say " for the non-finance people"

No. I'll go ahead and target my explanations to the exact people who may not understand the topic being discussed. If you feel like you're being looked down upon, that's your insecurity, not my problem.

I am shocked that an investing website that uses a quote from Fight Club atop all its pages is sensationalist. Absolutely, completely shocked.

I thought that's what I implied. Sorry if that wasn't clear.

I'm of the opposite opinion. While I worked as an equities trader/financial analyst, we didn't move our investments around within an industry all that frequently. When buying, we'd look for a strong sector and then the strong companies within that sector. That's the only major point at which we'd compare between companies within an industry. Once invested, you're not really comparing company vs. company, you're comparing companies against themselves over time in order to evaluate the sector performance. Basically, you have JPM-Q1 vs. JPM-Q2 much more frequently than JPM-Q1 vs. GS-Q1. Non-GAAP reportings typically serve exactly that purpose. It always just comes down to your use-case.

other languages also use things metonymously, so maybe hating human cognition is a safer bet.

Well it's an article about quarterly earnings, it's OK to use financial terms.

Enterprise

Have you tried using Google Sheets vs Excel for more than an hour? Google has a few more years to catch up for Excel.

Financial Accounting Standards Board.

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

Definitely not true. You can manipulate cash flow. For example you can give your customer a sweet heart deal where you give your customer a massive discounts on future orders for upfront payment you get a lot of cash the current q, but you are hurting yourself in future q. You can also increase you ap and make cash flow better.you can also pay employees with stock and increase cash flow, but decrease share holder value.

The only trouble I have with what you've said are in your examples for cash basis vs. accrual. Even on a cash basis I have to depreciate capital goods over time. The capital asset still has value regardless of my accounting method, so in a sense I've converted the cash (an asset) into a machine (another kind of asset). I still expense over time under the cash method because I'm representing things like wear and obsolescence rather than showing the commitment to an expense vs. the actual settlement of that commitment.

I think it's easier to demonstrate on the revenue side: if I sell a customer something and give them 30 days to pay, under the cash method I don't record the sale until I actually receive the cash whereas under the accrual method I record the sale when I invoice the customer: in the cash basis Accounts Receivable is basically a non-booking account and under the accrual method Accounts Receivable is an asset account. (Note I'm ignoring issues of deferred revenue :-) ).

I do think your definitions are sound.

Note: there are some U.S. tax rules about the first $X yearly capital purchases being immediately depreciable each year (though it's a relatively small amount).

Non-GAAP lets executives create nicer Power Point presentations.

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"!!?

Start menu searches are not "asking Cortana questions".