U.S. accounting rule makers approved a change in reporting regulations on Wednesday that might benefit technology companies such as Apple Inc , allowing them to recognize more revenue when products are sold.

The change, which analysts expect to provide a more accurate financial snapshot of companies such as Apple, Palm Inc

and Cisco Systems Inc , was approved in a 5-0 vote by the Financial Accounting Standards Board.

The change relates to the way revenue is recognized for products -- such as smartphones -- that combine hardware and software. Previously, such devices were governed by accounting rules that applied to software.

Under accounting guidelines for software, revenue is recorded over a product's expected life cycle, typically years.

If you had a product that had both a hardware element to it and a software element ... if the software was critical to it, then you had to follow the software rules, said Brian Minnihan, a partner in the technology practice of accounting firm BDO Seidman.

The change takes effect for fiscal years beginning on or after June 15, 2010, but earlier application is permitted. Minnihan said some companies may choose adopt the new rule as early as the current quarter.

Analysts say the accounting change will likely have the most impact on Apple, whose sales of the popular iPhone has not been fully reflected in its quarterly results.

Under existing rules, Apple booked sales of the iPhone over two years. Similar treatment was used for Apple TV.

But Apple had begun reporting non-GAAP results to provide a better picture of its sales and profit. For example, in the June quarter, the company reported GAAP revenue of $8.3 billion and non-GAAP revenue of $9.7 billion. It reported a GAAP profit of $1.35 a share and a non-GAAP profit of $2.14 a share.

Apple, which supported the rule change, declined to comment. But analysts expect the new guidelines to allow Apple to recognize far more revenue from the iPhone.

I don't know if we're going to get 100 percent, but it's certainly going to be higher than it is now, said Kaufman Bros analyst Shaw Wu.

But he does not expect the rule change to significantly impact the valuation of the company.

Most professional investors were already valuing this thing off non-GAAP or free cash flow, he added.

(Reporting by Gabriel Madway; editing by Leslie Gevirtz and Andre Grenon)

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