Software accounting way off best practice

NEWS Software companies are falling short of best practice accounting policies by some distance. According to a report of 41 listed companies surveyed by Ernst & Young, most still count revenues in their reports before sales are completed. Although this kind of behaviour is traditional in the software business, it is frowned upon by organisations such as the Accounting Standards Board, which has put a paper on this subject out for consultation until October. The long-term goal is some form of standardisation in accounting methods. Just how results are reported has been a big issue in the US this year, with many major high-tech firms hiding large one-off costs and write-offs by using pro forma accounting.