RE:RE:RE:Confidential Agreement Hi everybody,
My best "accounting" guess on how any settlement would be treated:
- under Generally Accepted Accounting Principles (GAAP), revenues MUST be reported when a settlement is enforced/official, on the corresponding date of settlement (not necessarily the payment date - think accounts receivable).
- CONFIDENTIALITY: BB and FB have some flexibility about what relevant info they disclose, and can lump revenue in with other similar IP revenue, but those of us who are familiar with BB's typical revenue streams will be able to make an educated guess as to the settlement amount IMO
My guess is that FB and its lawyers don't want dtails of the patent and related lawsuit made public, as it could further harm their reputation. If it was me, I wouldn't advertise that I may have misappropriated another company's IP and gotten caught. In the guilty party's view, the sooner their cheque is cashed and details swept under the rug, the better.
in summary, we should expect to see a "lump-sum" recognized as revenue (i am not aware of accounting rules that allow for such revenue to be spread out/amortized over time). If an agreement includes future royalties, these would be recognized in the future as they are earned.
disclosure: Yes, I am an accountant, but not an expert in accounting for litigation. Very high priced lawyers and accountants with specific expertise would handle this for the companies.
hope this helps,
mas75