100% agree with your posts
@paulgf @chakay @Ryzie @Winter08
Let's be very clear as some others still seem confused. There are no 'game changing' errors in the accounts. However, in light of us learning about the exact details of the financing arrangements then there are some improvements that need to be made.
Quarterly 4C cash reports.
We need them to provide the split of the cash balance is terms of what's in 'unrestricted cash' accounts and what's in 'restricted security deposit cash' accounts. There is nothing wrong with them just providing 'total cash' as they have been, but it would certainly be more helpful if they could split it out each time.
Balance sheet Accounts
Definitely they need to start splitting out the deferred revenue liability account. The first payment before the customer accepts video should be coded to a 'non-accepted customer deferred revenue' liability account and then once the customer accepts it should be moved across to an 'accepted customer deferred revenue' liability account. They are both liability accounts, so no material change to overall balance sheet. However, it would help us to really see how much future revenue is locked in with a signed contract compared to future revenue that is still in the production pipeline.
P&L Accounts
I'm comfortable that P&L accounts are fine. The conversion from deferred revenue liability to revenue income starts once the customer accepts video and is pro-rated over 12 month contract life.
