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Oct
19
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The FASB’s decision means Apple, and other technology companies, will no longer have to pretend that every dollar it books in sales won’t fully materialize until years in the future.
Apple won’t be the only company to benefit. However, it will be among those benefiting most, thanks to its surging iPhone business. Apple has long reported what its numbers would look like if it didn’t have to defer recognition of iphone, along side its other numbers.
As a result, the shift won’t take institutional investors by surprise–they saw the accounting rule change coming.
It will, however, make Apple look more attractive to retail investors, Morgan Stanley analyst Kathryn Huberty wrote in a note to investors Wednesday.
It could also result in larger earnings surprises in the future, Huberty argues, because investors have often underestimated just how profitable the iphone has been for Apple.
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