With the updated revenue recognition
standards, recognition for software and technology is expected to continue to
present challenges for FS preparers.
In May
2014, FASB and IASB issued largely converged revenue recognition
standards. This new guidance replaces
virtually all current revenue recognition guidance, including software revenue
recognition guidance in ASC 985-605. The accounting change will be especially
notable for software/technology companies and may require modification to
systems, processes, controls, and documentation to meet the new requirements.
Ways of
doing business continue to evolve as do the views of the standard setters and
regulators. It is imperative that any
company required to apply the software revenue recognition standards be
thoroughly knowledgeable of the guidance. The new guidance will change how
software entities are recognizing revenue for these contracts in a few notable
ways.
Most
companies in the software industry will be significantly affected. The level of
modification to current revenue recognition practices will depend on the nature
of the company’s revenues. Those companies with software license revenue will
be the most affected. There will be a
lesser impact on the recognition of software-as-a-service (SaaS) revenue.
Software companies' arrangements with customers often include multiple components wrapped into one contract. These could include:
ASC 606 provides a more defined structure for assessing all revenue transactions and consists of five elements:
This CPE Accounting webinar is part one in a two-segment series that will
deal with Revenue Recognition for Software and Technology companies. It is designed to provide insight related to
the new revenue recognition standard as it applies to software and technology
processes.
Owner, Lynn Fountain Consulting and Training
Lynn Fountain has over 39 years of experience spanning public accounting, corporate accounting and consulting. 20 years of her experience has been working in the areas of internal and external auditing and risk management. She is a subject matter expert in multiple fields including internal audit, ethics, fraud evaluations, Sarbanes-Oxley, enterprise risk management, governance, financial management and compliance. Lynn has held two Chief Audit Executive (CAE) positions for international companies. In one of her roles as CAE, she assisted in the investigation of a multi-million-dollar fraud scheme perpetrated by a vendor that spanned 7 years and implicated 20 employees. The fraud was formally investigation by the FBI and resulted in 5 indictments estimating a $13M fraud loss.
Ms. Fountain is currently engaged in her own consulting and training practice. She has successfully executed on several consulting assignments spanning areas of accounting, risk, ERM and internal audit. She is a highly sought-after trainer and international speaker and has produced hundreds of courses delivered through seminars, conferences and on-demand training. She is the author of three separate technical books.
Ms.
Fountain obtained her BSBA from Pittsburg State University and her MBA from
Washburn University in Kansas. She has her CPA, CGMA, CRMA credentials.
Course Level
Credits
Instructional Method
Pre-requisites
Advance Preparation
MY-CPE LLC, 1600 Highway 6 south, suite 250, sugar land, TX, 77478
MY-CPE LLC (Sponsor Id#: 143597) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors.
PA
Very helpful introduction to Revenue Recognition for Software andTtechnology
TB
Outstanding course with great summary and examples.
BM
Nice summary but questions on 985.
MD
Good Stuff
SH
good
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