InterDigital Inc (IDCC)

[olddog967]

vegas: What used to be called a per unit license, with royalties due IDCC reported after the end of the quarter, is now called a variable agreement. Under their old accounting system this would result in royalties from these licenses being a quarter in "arrears". Under current accounting procedures IDCC now estimates the royalties due and includes them in the current quarter's report.

Again from the 10-K:

"Variable Agreements
Upon entering a new variable patent license agreement, the licensee typically agrees to pay royalties or license fees on licensed products sold during the term of the agreement. We utilize the sales- or usage- based royalty exception for these agreements and recognize revenues during the contract term when the underlying sale or usage occurs. Our licensees under variable agreements provide us with quarterly royalty reports that summarize their sales of covered products and their related royalty obligations to us. We typically receive these royalty reports subsequent to the period in which our licensees’ underlying sales occurred. As a result, we are required to estimate revenues, subject to the constraint on our ability to estimate such amounts."

note: It is the annual report 10-K, not the quarterly 10-Q, that has all their details concerning accounting policy and procedures.