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January 9, 1997updated 05 Sep 2016 12:52pm


By CBR Staff Writer

System Software Associates Inc, acting on the advice of its new independent auditors, KPMG Peat Marwick LLP, has changed its accounting method for reseller agreements so that revenue is recorded at the time of sale to the end-user. As a result it is having to take about $46m of revenue out of 1996 and push it into later accounting periods, and it has thus restated its figures as shown alongside. The company said fourth-quarter expenses were affected by a substantial increase in reserves for warranty and doubtful accounts as well as accounts receivable write-offs, which altogether came to $10.5m. System Software said software license fee revenue rose to $81.6m, up 81% on the third quarter, reflecting early success from the rollout of its BPCS client- server Version 6.0 product. The restatement of fiscal 1994 reflects the reversal of $10.1m in revenue from a software contract originally recognized by the company in the third quarter of fiscal 1994. The fiscal 1995 financial statements were restated to reflect the reversal of revenues primarily with respect to two items – $5m in revenues originally recognized in the third quarter of fiscal 1995 from the final two installment payments of a four installment payment contract. The other was $15m in revenue originally recognized in the third and fourth quarters of fiscal 1995 from two related Latin American reseller agreements.

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