Revenue Recognition

[a] principles of revenue recognition, applications

Download slides

Terms covered: Accrual accounting, Revenue recognition standards, Agent

Case Study: SoftwareCo

SoftwareCo enters into a contract with Client Corp. SoftwareCo will provide Client Corp with a 1-year license to its proprietary accounting software for a fixed fee of $1,200. SoftwareCo will also provide monthly software updates and basic online technical support for the duration of the license. The license, updates, and support are distinct. SoftwareCo determines the standalone selling price of the license is $900, updates are $300, and support is $300.