Wave Systems Corp. (fka WAVXQ)

[1stnflight]

Ramsey: Accrual accounting for revenue

Deferred revenues = Cash from STM or customer in bank plus Wave still owing the customer a service or product. Meaning Wave has not earned the cash/revenue. Revenue is booked in a future period(s) when it is earned.

Accrued Revenues - Wave has received the cash (terms Cash due upon receipt/shipment), or has not received cash and gives customer open credit terms of say Net 30 days. An Accounts Receivable is set up and revenue booked in same period because Wave has fullfilled its obligation (provided or shipped the service/product) thus has earned the revenue.

Like Eamonshute, I feel it is likely Wave is in the accrued revenue scenario thus what is shipped in Q2 is booked in Q2. This will not be true if Waves has not fullfilled its obligation in Q2. Payment is different and is independent of when the revenue is booked.

Without seeing the contract and or purchase orders with/from STM we are only guessing when revenues are earned then booked, and terms for payment.