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Topic 606: Revenue Recognition for Software and Technology (Part 2)

Access Self Study

Learning Objectives

  • To explain how to account for non-software deliverables in an arrangement containing more-than-incidental software.
  • To review the applicability of the guidance when licensed software is hosted by the vendor.
  • To analyze how up-front fees impact revenue recognition. 
  • To inspect how future discounts impact revenue recognition. 
  • To discuss if software components are excluded from the scope of the new guidance.

Course Description

This online webinar by Lynn Fountain is part two 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.

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.

With the updated revenue recognition standards, recognition for software and technology is expected to continue to present challenges for financial statement preparers. 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.

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:

  • Software licenses
  • Software-as-Services (SaaS)
  • Post-contract customer support (PCS) 
  • Other goods or services. 

The new guidance will change how software entities are recognizing revenue for these contracts in a few notable ways.

ASC 606 provides a more defined structure for assessing all revenue transactions and consists of five elements:

  • Identify the contract with a customer
  • Identify the performance obligations (promises) in the contract
  • Determine the transaction price
  • Allocate the transaction price to the performance obligations
  • Recognize the revenue when (or as) the reporting organization satisfies the performance obligations

Join this CPE Accounting course to get insight related to the new revenue recognition standard as it applies to software and technology processes.

Live Webinar Qualifies For

  • 1 CPE Credit of Accounting for Certified Public Accountants (CPA-US)
  • 1 General Credit of Accounting for Accountant/Bookkeeper/Tax Professionals
  • 1 CPE Credit of Financial Accounting for Certified Internal Auditors (CIA)
  • 1 CPE Credit of Accounting for Certified Fraud Examiner (CFE)
  • 1 CPE Credit of Financial Reporting for Certified Management Accountants (CMA)
  • 1 CPD Credit of Financial Reporting for Accredited in Business Valuation (ABV)
  • 1 CPE Credit of Financial accounting for Certified Valuation Analyst (CVA)
  • 1 CPD Credit of Financial Reporting for Certified Financial Forensics (CFF)
  • 1 PL Credit of Accounting for Chartered Financial Analyst (CFA)
  • 1 CPE Credit of Accounting for Certified Government Financial Manager (CGFM)
  • 1 CPE Credit of Accounting for Internal Audit Practitioner (IAP)
  • 1 CPE Credit of Financial accounting for Certified Business Appraiser (CBA)/Master Certified Business Appraiser (MCBA)
  • 1 CE Credit of Financial accounting concepts for Certified FP&A Professional (FP&A)
  • 1 CPE Credit of Accounting for Qualification in Internal Audit Leadership (QIAL)
  • 1 PL Credit of Accounting for CIPM

Self-Study Webinar Qualifies For

  • 1.5 CPE Credit of Accounting for Certified Public Accountants (CPA-US)
  • 1.5 General Credit of Accounting for Accountant/Bookkeeper/Tax Professionals
  • 1.5 CPE Credit of Financial Accounting for Certified Internal Auditors (CIA)
  • 1.5 CPE Credit of Accounting for Certified Fraud Examiner (CFE)
  • 1.5 CPE Credit of Financial Reporting for Certified Management Accountants (CMA)
  • 1.5 CPE Credit of Financial accounting for Certified Valuation Analyst (CVA)
  • 1.5 CPD Credit of Financial Reporting for Certified Financial Forensics (CFF)
  • 1.5 PL Credit of Accounting for Chartered Financial Analyst (CFA)
  • 1.5 CPE Credit of Accounting for Certified Government Financial Manager (CGFM)
  • 1.5 CPE Credit of Accounting for Internal Audit Practitioner (IAP)
  • 1.5 CPE Credit of Financial accounting for Certified Business Appraiser (CBA)/Master Certified Business Appraiser (MCBA)
  • 1.5 CE Credit of Financial accounting concepts for Certified FP&A Professional (FP&A)
  • 1.5 CPE Credit of Accounting for Qualification in Internal Audit Leadership (QIAL)
  • 1.5 CPE Credit of Accounting for Iowa Licensed Public Accountant (IA-LPA)
  • 1.5 PL Credit of Accounting for CIPM
  • 1.5 CPE Credit of Accounting for Maine Licensed Public Accountant (ME-LPA)
  • 1.5 CPE Credit of Accounting for Delaware Licensed Public Accountant (DE-LPA)

About Instructor

Lynn Fountain, CRMA

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.  

  • Raise the Red Flag – The Internal Auditors Guide to Fraud Evaluations”.
  • Leading the Internal Audit Function
  • Ethics and the Internal Auditor’s Dilemma

Ms. Fountain obtained her BSBA from Pittsburg State University and her MBA from Washburn University in Kansas. She has her CPA, CGMA, CRMA credentials. 


Additional Information

Course Level

Basic

Credits

1

Instructional Method

  • Group Internet Based
  • QAS Self Study

Pre-requisites

None

Advance Preparation

None

FAQ’s

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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.

Ratings and Review

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4.3

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JH

Jacob Harney, CPA (US)

Ease and convenience is fantastic.

MC

Marianne Coonley, CPA (US)

very informative

MD

Max Davis,, CPA (US)

Good Stuff

PA

Patricia Anderson, CPA (US)

This was a tough class to understand and apply. Probably need to get more training in the overall ASC 606 application to softwre sales

JY

Jia Yu, CPA (US)

good refresher

1 Credit

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Subject Area

Accounting

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