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Prominent Accountants Blast Apple's $1.99 802.11n Upgrade Reasoning

Some sites have been picking up on a recent Wall Street Journal article (paid subscription required) that quoted prominent accountants disregarding Apple's stated reasons for charging $1.99 for enabling 802.11n capability on Core 2 Duo based Macs and the Mac Pro.

A statement from Apple had previously blamed the charge on "generally accepted accounting principles", or GAAP. However, the Journal's interviewees do not agree.

"GAAP doesn't require you to charge squat," says Lynn Turner, managing director of research at Glass Lewis & Co. and a former chief accountant of the Securities and Exchange Commission. "You charge whatever you want. 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."

[...]

Still, Apple's language surprised officials who oversee accounting rules. "Accounting doesn't require any charge for anything," says Edward Trott, a member of the Financial Accounting Standards Board, which writes the accounting rules. "No, GAAP doesn't tell you to do anything. You need to work out your transaction with your customer, and GAAP will tell you how to reflect your transaction with that customer."

The reaction from the Mac community appears to be mixed since the formal announcement from Apple. While many were happy to see the final price drop more than half from its previously rumored $4.99 pricetag, many others were frustrated at having to pay anything for hardware capability already in their systems.

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