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Apple may offer Wi-Fi update for free, says former chief beancounter

The world according to GAAP

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There's one flaw with Apple's excuse for planning to charge $2 to enable 802.11n next-generation Wi-Fi on Macs that have the hardware to support the technology: it's bollocks. So says the one-time most senior accountant in the US, Lynn Turner, former chief accountant of the Securities and Exchange Commission.

When it emerged Apple might charge $5 for the upgrade, insiders claimed it had to do under the rules laid down by the post-Enron collapse, post-WorldCom collapse Sarbanes Oxley Act. This puts down in black and what the so-called Generally Accepted Accounting Principles (GAAP), which now govern how US firms can claim revenues.

Apple shortly confirmed that this was the case, but sweetened the pill by dropping the price to $2.

Now, Turner, quoted by the Wall Street Journal, claims GAAP does not force companies like Apple to charge for updates that add previously unadvertised functionality, as Apple claimed.

"You charge whatever you want," she told the paper. "GAAP doesn't even remotely address whether or not you charge for a significant functionality change. GAAP establishes what the proper accounting is, based on what you did or didn't charge for it."

To be fair, Turner's statement simply says Apple can give the update away for free, not that this is an easy a path to take as charging an up-front fee for the update - which it may also have to charge if it releases a version of its Windows-on-Mac utility, Boot Camp, for versions of the Mac OS X previous to 10.5, for the same reason.

If Apple doesn't charge for the update, it may have to restate revenues and face a bureaucratic nightmare that far outweighs the hassle to users incurred by having to pay $2. Or it might not.

Generally Ambiguous Accounting Principles, anyone? ®

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