Smartest Accountants in the Room

Mac Geeks vs. Apple Accountants. Fight!

According to The Inquirer, Apple is “blaming” an Enron-inspired US Federal Law Sarbannes-Oxley (SOX) for the need to charge US$2.00 for the 802.11n update to MacOS X 10.4. Following the link at the bottom of the page, there is a slightly longer article on iLounge.

SOX? Probably more important than the Auditing (and that lovely open ended section 404 about ‘Management on Internal Controls‘, which I’ve read) section, its the FASB Revenue Recognition rules. All companies that provide a contract (let’s say a End User License Agreement) have strict controls and rules related to how the revenue from that contract must be accounted for. There are whole teams of lawyers and accountants that know these rules blind, and apply them to company revenue-related activities.

Companies that mis-state revenue, let’s say as it has offered an material update to technology in a following quarter and not correctly accounted for it, and if offered “free” later would have to re-state revenue for previous quarters. Now, if Apple had “pre-announced” their 802.11n plans, and been a more open company, I think there would be no charge. Apple has chosen it’s own destiny.

Yes, accounting can be weird. The world of contract law is weirder. But these are the cornerstone of the capitalist world we find ourselves in, and stable for nearly 500 years. Until Enron bent the rules, too far.

So, now US$2.00 seems like a minuscule amount to pay compared to engaging teams of Apple professionals to this Sisyphean Task. However, the cost to Apple is more chipping away at the information control fortress.

ps: I am neither a rev-rec, nor sox expert!

Update: 21st January 2007: Apple to Charge for Faster WiFi from CNet. Also amended prices above from US$5 to US$2.