The Power of Accounting

Everyone knows Apple make a couple billion of dollars every year, but how many is ‘couple’ exactly?

Do you recognize this?:

Analysts have predicted Apple’s 2010 revenue to be around 11 billion, but methods inconsistent with GAAP have raised it to a startling 15.6 billion. FASB say that the new computation method has given Apple over 3.5 billion dollars of a boost.

It is somewhat amazing that these accounting methods have given Apple such a huge boost. We see in our Financial Accounting Class what a deferred revenue is, but to see its significance in the work-force is a stroke of insight for me. Revenue generated from the iPhone is up by a startling 90%!

In my opinion, these accounting changes for Apple are quite fair. It provides a much more accurate picture as to why Apple’s cash stock is so high. It is pleasing to see this change.