Accounting change for iPhone may see Apple stork and profits rise
By providing free software updates for the life of the iPhone, Apple says this account’s for many iPhone sales, although at the same time Apple does gain up front cash which produces an extraordinary cash flow relative to reported earning in previous years reports businessinsider.
The success of the iPhone is visible to anyone who looks at Apple’s cash flow statement, but this may soon change. Credit Suisse last week reported an accounting rule change which might allow Apple to book most iPhone revenue upfront.
This move would cause Wall Street analysts to hike up their earnings estimates and thus would significantly boost Apple’s reported earnings and would make Apple stock appear much cheaper to unsophisticated investors.