[williamcotton]

Amortization is incredibly important in a software company. Most software is going to be basically useless in 10 years time. Your company's Android app? There might not even be smartphones in 10 years.

And for something as complex as making software it papers over almost any meaningful understanding of how well a firm is operated.

That's what I mean about my head turning into a black hole. Management using such metrics internally is basically saying that they don't give a rat's ass about how much anything really costs.

As we've seen over the last year and a half, the chicken's come home to roost at some point. Rosy pictures are ripped to shreds by the actual cash flows.

Financial accounting is about where you've been for the last three months. Managerial accounting is about where you're going in the next three years. Our industry is firmly set on driving while only looking out the rearview mirror. I expect this to be changing rapidly at most software firms.