InterDigital Inc (IDCC): Year end bonuses and EPS IDCC estimat...

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Re: The_Net post# 277735

Wednesday, 11/18/2009 1:04:45 PM

Wednesday, November 18, 2009 1:04:45 PM

Year end bonuses and EPS

IDCC estimates the bonuses that are going to be paid and accrues them proportionally each quarter. This should result in steady charges each quarter. Estimates usually will need to be changed as time goes by and reality replaces projections. When expectations are adjusted, there is a cumulative adjustment to the accrual at that time and the future accruals reflect the updated expectation.

Barring any significant license being signed, I doubt that IDCC would pay out bonuses beyond the current expectations. It would be stupid for management to lower the accrual in Q3 if they are considering paying out larger than projected bonuses in Q4, because an additional charge in Q4 would definitely raise howls of protest.

See Olddogs typically on point post regarding the bonus accrual.
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