Overview:
Diverse business models, industry-specific sales practices, new and evolving sales channels and software-focused accounting literature make revenue recognition for software a real challenge. In this targeted seminar, you'll learn:
- How ASC 985 (SOP 97-2) governs specific aspects of software revenue recognition
- How to record revenue for software that is licensed, sold, leased or otherwise marketed
- How to allocate revenue in multiple-element and bundled arrangements
Objective:
To provide accountants serving software-oriented companies with a detailed examination of the rules for recognizing revenue for software. You'll review the intricacies of multiple-element arrangements and various contract structures used by the software industry. You'll leave with a thorough understanding of the differences and similarities between software revenue recognition and "regular" revenue recognition.
Emphasis:
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Basic revenue recognition
– Evidence of arrangement
– Fixed and determinable fees
– What constitutes delivery or performance
– Collectibility - Licenses and subscriptions
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Multiple-element arrangements and use of VSOE or TPE
– Support
– Updates and upgrades
– Hardware - Platforms, hosting, cloud computing and SaaS
- Contract accounting: percentage of completion, completed contract and zero margin
- Relative Selling Price Method
- Setup fees and other up-front costs
- Penalty clauses
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Combining and segmenting contracts
– Gross vs. net - FASB Revenue Recognition Project, Joint FASB/IASB Exposure Draft, recent pronouncements and international convergence
