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Good links on the accounting side Italian and some interesting thoughts. Thanks!!
https://seekingalpha.com/filing/5429582 just incase anyone wants to read the report themselves. there is some other quite interesting stuff in it, some of which serves to emphasise the highly complex nature of rhapsody's business relationships etc
i did say i would post some thoughts on the accounting position re the timelines for revenue etc and although i don't think this will help as such, here are my thoughts. disclaimer I've no accountancy background at all, so all this could be completely wrong.first this is clearly an area of significant complexity and we will only know the position when the accounts have been prepared. that said, the Form10-k annual report filed by realnetworks for year to dec 2020 has some interesting info. it states that in august they (real networks) entered into a support agreement in connection with the execution by napster of a definitive agreement pursuant to which napster will become a wholly owned subsidiary of melody vr. it further states that effective on the execution of the Agreement and Plan of Merger on 25th august, napster was treated as discontinued operations and held-for-sale for accounting and disclosure purposes and subsequently sold in december 2920. as such tapster's operating results and financial condition were recast to conform to this presentation.....i think this partly answers the question about the effective date for revenue.apparently while the effective date for acquisition and disposals of a subsidiary should be the date on which control passes, this can be significantly different from the date in a legal agreement.i think this means that there was a binding, but conditional, agreement on the 25th august under which in effect napster as was was put into a form of accountancy purdah, so that its ongoing performance was kept separate from real networks pending completion of the definitive agreement at the end of december. i therefor expect the napster (as is) accounts to 20th dec 2020 to reflect at least some of the figures for napster as was going forward from 25th august. that said how those figures will translate into new napsters accounts is really one for the accountants .assets acquired in this way have to be subjected to fair value valuations of acquisition and there are many technical accountancy principles to be applied. it seems that there is one particular area which will apply to a company like napster as was.i assume that a large part of its revenue is in the form of pre-payments for services to be provided over a subsequent period of time.(indeed possibly almost all of its revenue is of that nature. the attached link explains the technical accounting difficulties which this type of revenue can experience on acquisitionhttps://www.journalofaccountancy.com/issues/2016/apr/deferred-revenue-accounting-rule-in-acquisition.html i hope new napster is alert to this (they will be I'm sure ), as it seems we could see an ostensible drop in revenue until the accounting anomaly is worked through the system. apologies if this is complete rubbish and if there are any accountants on here it would be good to hear from you.sorry this is bit boring for a friday night.i really should get out more.