By adopting the accounting change, EDS is moving from a system under which it recognizes revenue based on the percentage of work completed on a contract to one under which it reports only the revenue that has actually been paid by the customer. Despite the up-front financial hit, analysts say the move is positive as it gives investors and concerned customers a more-accurate picture of the company's finances. "It raises the level of information, and that's always a good thing," says David Garrity, an American Technology Research analyst.
EDS originally was scheduled to report third-quarter earnings last week but delayed the announcement until Wednesday so its accountants could fully evaluate the impact of the accounting change.