SCO posts Q2 Loss, Gets $11k from Linux

Paul Hands sent us linkage to SCOs Q2 Financials. "The highlights are that SCOX only collected $11k (yes, K) for that much-discussed license for EV1 and other Licensees. Cost of that $11k was well over $4M. Overall, revenue was just over $10M, and they made a net loss applicable to common stockholders of $14,959,000, or $1.06 per diluted common share." Update According to the SCO conference call, this isn't accurate.. their Linux extortion income will be listed in the Q3 financials.

Comments

article.

[abscondment]

Link to the realease on the SCO's site

Text is wrong, this quarter does not include EV1

[Anonymous Coward]

During the conference call earlier in the day, SCO stated that the EV1 revenue was not included in this quarter, and will start showing up in Q3.

Re:And the best bit is...

[CrazyLion]

Just to clarify. Goodwill in this case is an accounting concept referring to accounting treatments of premium paid in a merger. Until fairly recently Goodwill used to be amortized (i.e. company would write it off over time). Under new rules, it's carried indefinitely and assessed for impariment. According to SCO's March '04 10-Q, most of their goodwill comes from acquisition of Vultus, Inc. Not very much related to the loss of face in the Linux debucle.

Piercing the Corperate Veil

[alficles]

Actually, IBM may be able to Pierce the Corporate Veil and go after Darl himself. While they may or may not be able to put him in jail, they can sue him for way more than he owns (which is much more than he is worth). In order to go after Darl, IBM would have to prove three things: (quoted from linked article)

According to the court, the instrumentality rule requires proof of three elements:

1. complete domination and control of both the entity's policy and business practices;
2. use of such control to commit fraud or wrong, breach of a legal duty, or a dishonest or unjust act (such as using such control to avoid personal liability previously assumed by an individual); and
3. that the aforesaid control and breach of duty must proximately cause the injury or loss.

IMO, the Nazgul should have no trouble with showing these in a countersuit. Darl is not going to be out of hot water any time soon.

"Goodwill"

[Theatetus]

Goodwill is a term of art in accounting. There's a brief summary on Wikipedia. Essentially, "goodwill" is the magic dark matter of accounting that is used to explain whither otherwise inexplicable money goes and whence it comes. For instance, say one of your company's buildings appraised for $1 million but somebody else bought it for $2 million. That goes down as $1 million of "goodwill" so that the numbers balance out. Conversely, if someone else's building appraised for $2 million but he sold it to you for $1 million, that's another example of $1 million of goodwill on your books.

Hint relevant to this situation: it applies to securities as well.

Re:"Goodwill"

[cweditor]

The charge is for "the impairment of goodwill and intangibles." This is a specific accounting situation covering the decline in value of an intangible asset such as a corporate brand, see the Financial Accounting Standards Board statement 142 or the March 2002 CPA Journal.