The changes pertain to unearned revenue, an accounting term used to refer to money received for services not yet rendered, such as advance payments. It is considered a liability on a company's balance sheet and is eventually transferred to income when the service is performed or the product is sold.
According to documents filed with the Securities and Exchange Commission, Microsoft incorrectly reported accruing $1.104 billion in unearned revenue and recognizing $914 million in unearned revenue as income in the fiscal first quarter.
The correct amounts for that quarter were actually $2.069 billion in new unearned revenue and recognized $1.879 billion of unearned revenue.
The company's fiscal second-quarter report was also amended to reflect the changes. Microsoft said the changes had no impact on net cash from operations.