| TheBigFatJ said: Whatever their profit is, it will be a paper-only profit. That is, their expenses will exceed their revenue, but they will hide that fact with money set aside and charged to their previous fiscal year. |
You obviously don't know anything about accounting...
If you are talking about the $1.1 Billion RRoD charge... Doesn't it make sense to charge the $1.1 billion to the timeframe in which the faulty consoles were sold? Seems to me that's where the charge should be not in some future fiscal year when you physically pay for it. Essentially, they took profit from the year in which they sold most of the faulty consoles and said, "We are earmarking it for repairs because it is not real profit if we collect money for a substandard product and then end up using future revenue to pay for it". Companies that rely on future revenue to pay for past mistakes go broke. Companies that set aside the money up front admitting the mistake stay in business.
