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In a meeting with financial analysts on Thursday, Microsoft for the first time disclosed details of its new financial reporting structure, in light of the radical organizational restructuring that CEO Steve Ballmer announced in July.

As we were told, gone are the classic five business groups units – Windows, Server and Tools, Microsoft Business, Entertainment and Devices, and Online Services – that analysts have traditionally used to measure Redmond's performance over the years.

In their place are five new reporting segments that are further grouped into two umbrella categories. But so far, how these groups' numbers represent the actual health of Microsoft's various business activities seems as clear as mud.

The two umbrella categories are Devices and Consumer (D&C) and Commercial – which sounds an awful lot like Microsoft has split its accounting between its consumer and enterprise businesses, but the truth is a lot more complex (and confusing) than that.

Take the three subcategories of Microsoft's D&C business, for example: Licensing, Hardware, and Other.

Licensing includes all direct sales of Windows and Office to consumers (not including Office 365). It excludes sales through Microsoft's Volume Licensing program – that seems logical enough – but it also counts license sales to hardware OEMs, which typically buy them in bulk.

Even more perplexing, D&C Licensing also lumps in revenues from Windows Phone, and not just from OS licensing, either. Microsoft has thrown revenue from patent licensing into the mix, too, including Windows Phone patents and the patents it licenses to makers of Android phones, which muddies the revenue picture somewhat.

Similarly, D&C Hardware includes all of the obvious stuff that you'd expect, such as Xbox equipment, peripherals and accessories like mice and keyboards, and Surface. But it also throws in revenue from Xbox Live subscriptions, which would seem to belong somewhere else, plus sales of video games produced by Microsoft's partners (but not Microsoft's own games).

The D&C Other category is perhaps the oddest bird out of the bunch. It includes revenue from Windows Store retail locations, app sales from the Windows Store and the Windows Phone Marketplace, search and display advertising, sales of video games produced by Microsoft, subscriptions to Office 365 Home Premium (but not other versions of Office 365), and "certain other consumer products and services not included in the categories above."

Puzzled yet? The enterprise categories don't do much to clear up the picture.

Commercial Licensing includes all volume licenses of client-side Windows, plus Windows Server and Windows Embedded (whether purchased through Volume Licensing or not). It also lumps in sales of server products, including Exchange, SharePoint, Lync, and SQL Server, plus Visual Studio, System Center, and the Microsoft Dynamics products with the exception of Dynamics CRM online. Oh, and it also includes Skype. Figure that one out.

There is no Commercial Hardware category, so Commercial Other covers all the rest, ranging from premier support services, to Office 365 (every version except Home Premium), Windows Azure, Bing and other online services, Dynamics CRM Online, and whatever else Microsoft sees fit to throw in there that doesn't belong in the D&C Other category.

In short, Microsoft doesn't seem to have done financial analysts many favors with this new structure. It has split its revenues from Windows and Office across multiple groups, such that they fall into different categories depending who's buying them. Poor-performing businesses have been lumped in with successful ones – tucking Bing in with Windows Server, for example. And businesses that depend on each other have been split apart, making it harder to tease out the success of any one initiative.

Worse, although Redmond says it will report revenues for each of the five subcategories, it will only report operating income for the two umbrella groups, Commercial and Devices and Consumer. It won't give income figures for the five subcategories independently.

And of course it goes without saying that with the new structure, analysts will no longer be able to make direct comparisons between Microsoft's financials for the current quarter and those of the previous year's quarter, because the numbers will no longer be baked the same way.

During the analyst meeting, CFO Amy Hood said Microsoft will hold a conference call to further explain the new reporting structure, including offering restatements of the past two years' earnings. But you can bet there will be more than a few grumpy and perplexed investors when Redmond reports its earnings for the first quarter of its fiscal 2014 on October 24. ®

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