In a unanimous vote, the Financial Accounting Standards Board (FASB) has, as expected, passed a proposed accounting change, which will make it faster for technology companies and other firms to recognize revenue related to hardware products that contain software. 

The new rules will greatly benefit companies that sell goods and services that combine hardware and software – especially companies manufacturing cellphones and other high-tech devices, and those making home appliances that come with installation and service contracts.

While the current rules help tech companies to recognize the sales of the products over a period of time, the changed rules will enable them to record the hardware portion of those profits straight away.

The proposed change will officially become effective in 2011, though companies will be permitted to implement it earlier.

Elaborating on the changed accounting rules, a report in The Wall Street Journal said: “When devices combine hardware with software, the entire sale is generally treated as software under the current rules. Under the change, companies could recognize the hardware portion of the devices' revenue and the value of some software upfront; the rest of the software portion of the revenue would still be recognized gradually.”

Apple, which would be one of the notable beneficiaries of the new rules, pushed for the change, which was also backed by Dell, International Business Machines (IBM), Hewlett-Packard (HP), Cisco Systems, Xerox Corp. and Palm.