Understanding the concepts and language of financial reporting
Whether you are an executive, manager or professional, you may need to evaluate a customer, plan new projects or policies, or simply deal with the financial aspects of your role. To be effective you'll want to be able to use the language of accounting.
Making the Microchip - At the Limits III is an overview of the semiconductor processing industry. This video course provides a comprehensive view of the complex manufacturing steps using non-technical terminology and analogies.
With the advent of FASB SAB 101 in 2001, customers have been endowed with tremendous power that can affect a business unit's revenue. What advice do you have to address this challenge?
Make good products that work when they are installed.
What is going to be more of a pain are the new Sarbanes-Oxley and 404 laws. They greatly effect when you can and can't recognize revenue, expenses, and all kinds of inventory. In the past we used to move revenue and expenses around quite loosely in order to make numbers in a particular time period and everyone was pretty happy. Those days are gone.
Most of this relates to acceptance, testing and getting a machine approved in the factory. This is not a new problem for us. It has just shifted from "how do we get this thing out of the factory on the last day of the quarter and signed off" to "how do we get the machine up, running and signed off by the factory." This may sound like heresy, but your relationships with the customer are key to success here. The customer can be very belligerent or cooperate. A customer does not normally sign off a product that is not operating perfectly, but we all know there is some leeway here.
Sometimes you can negotiate with the customer. I have told the customer, who was hesitating, that if he won't sign off we won't be in a position to have the support there that he desires, and that has turned him around. Bring the technical support in that you need to address his concerns and, even when it may not be fixed right then, he feels comfortable it will be taken care of.
With the Sarbanes-Oxley law you are going to have your auditors actually going out to your customer and asking them, "Did you really mean to sign that off?" The good news is that it will impact everyone in the U.S. the same. But the Koreans, Taiwanese, and Japanese will take advantage of this.