Case ID: 102061
Solution ID: 358

Computer Associates International Inc Case Solution

Case Solution

At the end of 2000, Computer Associates (CA) transformed its business design and exactly how it recognized revenue, on the face to higher serve its stakeholders. The brand new subscription-based license model offered clients greater versatility. Clients could sign up for any CA software for just about any time period, including month-to-month. With revenues recognized evenly within the existence from the contracts, management wished the brand new approach is needed CA steer clear of the absolute last second, finish-of-quarter push to shut deals. To assist traders comprehend the change, management made the decision reported "professional forma" figures that restated CA's complete history as though the organization had been using subscription licenses. Doubters asked, however, whether CA was using the lead in applying innovative methods to support clients or simply attempting to hide lackluster growth by restating prior performance within new revenue recognition method.

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