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The Cutting Edge | TECHNOLOGY BRIEFS

Microsoft to Take $350-Million Charge in Accounting Changes

September 28, 2000|Bloomberg News

Microsoft Corp. said it will take a $350-million charge in its fiscal first quarter to comply with new accounting rules. The charge reflects accounting changes for all public companies, requiring them to list derivatives such as foreign currency hedging on profit and loss statements, said Microsoft Chief Financial Officer John Connors on a conference call. The charge will show the effect of all historical derivatives, he said. The software giant also said it will use new categories to report quarterly revenue. Microsoft will break down sales by desktop software, which includes Windows and Office programs; enterprise software and services, or versions of Windows and products for server computers; consumer software and devices, including MSN Web sites, WebTV, wireless programs and games; and consumer commerce investments, consisting of Internet commerce ventures like the CarPoint automobile service. For the most recent quarter, which ended June 30, the main revenue categories would have shown $4.05 billion from desktop software and $1.08 billion for enterprise software and services, if those categories had been used at the time, the company said. Shares fell $2.06 to close at $60.63 on Nasdaq.

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