One of the enduring memories most visitors to London have is that of the voice at Underground stations warning you about the distance between the platform and the train. Soon after I returned from a tour of duty in London, that voice came screaming back as I was developing an alliance for PwC with Platinum Software (now Epicor) and they got hit for GAAP issues around software revenue recognition. Several careers were ruined and I got the sense from several of the executives that the SEC bullied them for accounting issues which are rounding errors compared to what Enron and more recent scandals have been about.
So, I read now over a decade later, Forrester counseling "Buyers must help Vendors work around their accounting constraints"
Huh? Why expect buyers to be sympathetic? If you are selling your house or your car do you expect sympathy from a buyer that someone has a lien on the asset?
As I have asked before, why does the software industry not challenge the SEC and audit groups that revenue recognition rules as currently written are outdated as services become the delivery mode du jour? Could it be that vendors have artificially high prices which they then discount when pushed (at close to 90%) but use "revenue recognition" as a convenient excuse during negotiations? Could it be it is sales commission recognition issues more than revenue recognition issues?
Yes, revenue recognition needs to be revisited. But not by buyers. By the software industry and the watchdogs. The mind (the GAAP) games have gone on for too long.
