Publications
Publications
- March 1993 (Revised March 1994)
- HBS Case Collection
Sierra On-Line, Inc. (A)
Abstract
Sierra On-Line, a fast growing software developer, is criticized by a Forbes journalist for excessively capitalizing software development costs. In contrast to most other software developers that typically capitalize about 20% of R&D costs, Sierra capitalizes 80%. Questions investors must address in valuing Sierra include: Does Sierra's account reflect economic reality? Is their accounting too aggressive or are their competitors too conservative? Is Sierra's business sufficiently different from its competitors to invalidate the comparison?
Keywords
Citation
Wilson, G. Peter, and Elizabeth H. McNair. "Sierra On-Line, Inc. (A)." Harvard Business School Case 193-142, March 1993. (Revised March 1994.)