Live: 300+ Best Black Friday Deals Live: Black Friday TV Deals BF Deals Under $25 BF Deals Under $50 5 BF Splurges 8 BF Must-Haves 15 Weird Amazon BF Deals BF Cheat Sheet
Want CNET to notify you of price drops and the latest stories?
No, thank you
Accept

SEC scrutinizes Microsoft books

Securities regulators are looking at financial records of Microsoft Corp. (Nasdaq: MSFT) regarding its reserves, the company said Wednesday.

The U.S. Securities and Exchange Commission is reviewing Microsoft's financial records, CFO Greg Maffei said, during an afternoon conference call with analysts, investors and news media. "We don't know everything the SEC will look into," he said. "Our understanding is ... it's related to reserves and reserve policy."

Microsoft believes the investigation was spurred by an article published sometime in January in the Wall Street Journal, Maffei said. The company has cash reserves set aside to cover charges for items such as returned software and undelivered upgrades.

During the conference call, Maffei also announced accounting changes that would add one penny per share to Microsoft's earnings in the fourth quarter. The modifications in how Microsoft accounts for unearned revenue will also boost per-share earnings by a penny for the full fiscal 2000, Maffei said. The changes were made to conform to a recent amendment to accounting standards, he said.

Microsoft remains comfortable with analyst estimates, with the penny added, Maffei said. "We're happy with the current pace of business," he said.

First Call's survey of analysts predicts fourth quarter earnings of 35 cents a share for Microsoft.>