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13:12
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Originally posted by eesuper:
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That is what I said earlier in my first post and I'm well aware of the difference between accrual and cash accounting. The revenue recognition takes place as services are provided - you are correct. The commitment by the customer would allow inclusion into ARR, (and inclusion in the 3DP balance sheet) that would then progressively be drawn down as services are being delivered in the reasonable expectation on the part of 3DP that all of that commitment will be used in the coming financial period for which the commitment is made. There is absolutely nothing dishonest about it, simply a financial accounting treatment of the arrangement. That is why sales reps are hovering around their accounts during the last quarter of any financial year to gain commitments to unused budgets where revenue might be recognised for sales commission purposes but accounting recognition be deferred until services are delivered. The only time it ever causes a problem is when the vendor seeks to recognise the commitment as revenue all at once. We can leave it there, I guess we will see during FY2024 how it pans out.
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The dishonest part is the implication that "remaining budgets" can be "spent" in the last month of the year. We all seemingly acknowledge that this isn't how it works. Good luck.
