Microsoft Changes Accounting Methods

Microsoft has announced a change in the method by which it reports on derivatives and hedging activities and as a result will absorb an $350 million extraordinary loss on its first quarter financial statements. Microsoft's CFO, John Connors, claims that reporting the loss will not have a significant impact on the company.

The company is also changing the way in which revenues are reported, by breaking out certain services and software types as separate line items. Revenue will now be reported in the following groups: desktop software, enterprise software and services, consumer software, services, and devices, consumer commerce investments, and other.

The change in revenue reporting is designed to highlight revenues from business software, consumer, and Internet products.

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