Microsoft has said a new way of reporting its financial results will be better aligned with its corporate reorganization and offer more insight into its business.
The company gave Wall Street analysts a peek at the new format last week and will start to use it next month when it releases results for its first fiscal quarter, which ends Sept. 30.
It remains to be seen whether people will find the new format more transparent or more confusing. The Windows business will be broken down and reported in different categories, for example, as will the Office business.
Chief Accounting Officer Frank Brod said the format is designed to accomplish several objectives.
"Our goals were to provide insight into our business model transition and economics, to show progress against our devices and services strategy and to deliver increased accountability on gross margins," he said in a webcast Thursday, according to a transcript.
The new format seeks to group similar products and services, such as Microsoft's hardware, in one place. "This will enable us to better monitor and manage our business," Brod said.
The structure breaks Microsoft's business into two divisions: Devices & Consumer and Commercial.
Devices and Consumer includes hardware products, such as the Surface tablet and Xbox 360. It includes licensing revenue from products like Windows Phone, the consumer version of Office and Microsoft's patents. And it includes consumer services such as Bing, MSN and the home edition of Office 365.
The Commercial sector includes licensing revenue from Microsoft's business products, including Windows sales to enterprises, server products and its Dynamics business applications. It also includes enterprise services such as Azure and the business version of Office 365.
When it offers comparisons to prior quarters, Microsoft will adjust the historical results to the new format, so that investors and analysts can make apples-to-apples evaluations.
"The new financial reporting structure will provide our company with more transparency, great accountability and better execution, not only for today but also for the long term," Brod said.
It's also intended to better reflect Microsoft's reorganization announced in July. CEO Steve Ballmer has said the restructuring will make Microsoft function in a more unified, cohesive manner. The company will be more agile responding to market opportunities as it evolves from a packaged software focus into a provider of hardware devices and cloud services, according to Ballmer.
As part of the restructuring, Microsoft dissolved its five business units -- the Business Division, which housed Office; Server & Tools, which included SQL Server and System Center; the Windows Division; Online Services, which included Bing; and Entertainment and Devices, whose main product was the Xbox console.
It replaced them with four engineering groups organized by function, around operating systems, applications, cloud computing and devices, and by centralized groups for marketing, business development, strategy and research, finance, human resources, legal and operations.
One element that hasn't been factored into the reorganization or the new reporting structure is the company's acquisition of the Nokia smartphone business, a transaction that hasn't yet closed. Also, at some point in the coming 11 months, Ballmer will step down as CEO and retire from the company. A replacement search is under way.
Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.
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