Microsoft may be offering a free upgrade to Windows 10 for consumers who own a Windows 7 or 8.1 PC. However, for accounting purposes, the company is labeling this generous deal as a "marketing and promotional activity" in order to avoid a situation that would have normally forced Microsoft to defer revenues from the Windows division in their quarterly financial results.
Microsoft filed a detailed report on their 2015 fiscal third quarter results last week to the US Securities and Exchange Commission. The report mentions the free upgrade to Windows 10 for Windows 7 and 8.1 users:
As noted by Computerworld, the language in that statement is important to Microsoft for accounting and revenue purposes.
So in other words, labeling the Windows 10 free upgrade as a "marketing" tool helps Microsoft in the long run financially, and may keep its stock price from going down in the short term.
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