Revenue Recognition For Software And Technology

385 Enrolled

2 Hours (On-Demand)

Lynn Fountain, CPA, CGMA, CRMA, MBA, Consultant, Author, Trainer

Former Chief Audit Executive for two global companies, expert in SOX, COSO, ERM and corporate governance frameworks. Nationally recognized trainer, speaker published author.

This instructor has 191 courses »

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

In May 2014, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) issued largely converged revenue recognition standards. This new guidance replaces virtually all current revenue recognition guidance, including software revenue recognition guidance in Accounting Standards Codification (ASC) Subtopic 985-605, Software—Revenue Recognition. 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.

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 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 changes how software entities are recognizing revenue for these contracts in a few notable ways.

Accounting Standards Codification (ASC) Topic 606, Revenue From Contracts With Customers, 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

This course is part one in a two segment series that deals 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.

Learning Objectives

Explore changes to the revenue recognition process for software and technology and companies that deal in this industry.
Explore the basic principles of revenue recognition for software and technology and companies that deal in this industry.
Examine the five step process of revenue recognition using software and technology as an example.
Explore practices involving revenue recognition and accounting for costs of computer software.

Last updated/reviewed: June 6, 2021

46 Reviews (204 ratings)Reviews

Anonymous

()

Watched this course after watching Lynn's other ASC 606 overview video. Recommend both but this expanded on some of the changes in the SW industry related to the new standard. A bit more complicated, but a good overview none-the-less

Anonymous

(Snr Accounting Consultant, CPA)

It was a great course to take after taking the Revenue Recognition overview course. Although still many details to follow, it made the process a bit easier to follow after the understanding of the 5 steps process overview.

Anonymous

(CFO)

Good overall presentation of the revenue recognition challenges faced by software vendors. I'd recommend to anyone interested in the topic. I wish there would have been a slide or two on SaaS, maybe in part 2.

Anonymous

()

Very good overview of revenue recognition components as it relates to technology and software. Also, gives a good overview of the old revenue recognition standard and compare it to the new guidance.

Anonymous

(IT Risk Associate)

Great concise course over revenue recognition for software and technology. Great information for IT Audit level staff on how the new acquisition of technologies affects the Financial Audit aspects.

Inna Shmukler

(Controller at Fornetix LLC)

Useful course, however, too many repeats from the other general 606 sessions. I was hoping this course would be more specific and would use some examples. I bit too general for me.

Anonymous

(VP Finance)

This is a great course to learn about Topic 606 as it impacts Software and Technology companies. Need to take the entire Revenue Recognition courses prior to taking this course.

Anonymous

(-)

This is a very good course on the Revenue Recognition standard specific to Software. Full of key concepts and cosiderations, this is a good intro course or a refresher.

Anonymous

(Accountant)

Thank you for going so in depth in the new software revenue recognition criteria. This is something I know nothing about and found it really interesting to learn about.

Sharon King

(Contractor at Self employed)

This course thoroughly explained the new standards for Revenue Recognition for software. Learning about the Variable Consideration element was most valuable to me.

Anonymous

()

The instructor provides plenty of insights on how to account for revenues using ASC 606 in a software/technology company in a clear and concise manner.

Anonymous

(Director)

I thought this course provided a good overview of the new guidance when compared to the old. It would be nice to have more examples to walk through.

John Sullivan

(Controller at Sophos, Inc)

Excellent overview, quite detailed. To enhance content it may be helpful to provide more examples of the process in real business activity.

Anonymous

(Accounting Manager)

The topics in this course were presented well. This was a good overview of how Topic 606 applies to computer software companies.

Anonymous

()

I enjoyed the content in this course. I thought the information was valuable for someone working in the software industry.

Anonymous

(Controller)

Excellent presentation of the changes in revenue recognition standards for software sales. Easy to follow and informative.

Anonymous

(Financial Analyst)

Having taken few accounting-based courses in my undergrad, this was a thorough and succinct course that taught me a lot.

Anonymous

()

This course was very helpful as I work in the software industry and wanted to brush up on the revenue guidance. Thanks!

Anonymous

(Accounting Manager)

Very thorough and applicable to SaaS companies and the unique challenges they face when it comes to revenue recognition

Bryan Chamberlain

(Controller at N/A)

This module is part of a series on ASC606 That all accounting professionals should complete. Excellent presentation.

Ron Villarreal

( at Ron Villarreal CPA)

Just looking at slides is not as lively as when the instructor's face was displayed simultaneously with the slide.

Anonymous

(Revenue Accountant)

Lynn Fountain's courses are always thorough and easy to follow. The courses are detailed with excellent examples.

Anonymous

(Consultant)

There's a big difference between "Pervasive (on handout)" vs persuasive (ASC wording). Please adjust accordingly

Anonymous

(CFO)

Explained very well and easy to understand. It's a complicated subject, but Lynn makes it much easier to get.

Sophia Kasozi

(- at City of Edmonton)

Great overview and of revenue recognition and the implications to software contracts/licenses. Thank you!

Anonymous

(Director of SEC Reporting)

Great high level summary and comparisons between ASC 606 and ASC 606 for software revenue recognition.

Anonymous

()

Some parts of the course were very theoretical. There was not enough time spent on concrete examples.

Daniel Bryant

(Senior Financial Analyst at Google)

Very good intro to an extensive and nuanced standard that takes a while to wrap your arms around.

Elizabeth Sahnas

(Finance Director at Workable)

This topic is especially relevant for financial professionals in the Saas and software industries.

Andrew DeLorme

( at Allscripts)

Great overview of ASC 606 - I look forward to digging into the more detailed sub-topic learnings.

Vinicius Bravo Ferreira

(Senior Manager at World Fuel Services)

Good content. Covered the main topics. Can be updated now the standard is already in place.

Anonymous

(-)

This an extremely comprehensive course. take this course if you work with software and tech!

Anonymous

(Chief Financial Officer)

Great course and easy to follow. The slides were very thorough and a good resource.

Anonymous

()

excellent course. I am very satisfied with the info. Thanks Lynn. You're the best.

Anonymous

(Maps and Chrome Controllership)

Good overview of rev rec; has pdf files for reference with material of the course

Anonymous

()

Nice course. Source materials are laid out well and meet the course objectives.

Anonymous

(CFO)

Good basic overview, a little repetitive of concepts taught in other courses.

Yemisi Akintola-Harrison

(Accountant at Google)

This was great! I appreciate how the course was very clear and easy to follow.

Maya Walker

(VP Finance at Carnegie Technologies)

Thank you so much for laying out complex topics as simply as possible!

Anonymous

(Sr Financial Reporting Analyst)

Great overview of how ASC 606 impacts software and technology revenue

Anonymous

()

Course is well developed and presented. Good review or intro course.

Anonymous

(Sr. Accounting Manager)

This course was very helpful. Well presented and easy to follow.

Anonymous

(Lead Senior Accountant)

The discussion between VSOE and SSP was not detailed enough.

Robert Godfrey

(CPA at Robert Godfrey, CPA)

Thank you very much for this guide into a new area for me.

Olga Malkiman

( at Dialpad, Inc.)

Nice comparison between 605 and 606 criteria and outcomes

Brett Maxam

(CFO at SSP Innovations)

Very helpful in breaking down changes to new guidance.

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Prerequisites

Course Complexity: Advanced

No advanced preparation or prerequisites are required for this course.

Education Provider Information

Company:

Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113

Contact:

For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .

Course Overview CPE

Course Syllabus

INTRODUCTION AND OVERVIEW

6:14Introduction to Topic 606 - Topic 606: Revenue Recognition for Software and Technology

17:18Overview of Changes

10:05Five Step Process

14:32Performance Obligations

14:49Transaction Price

12:36Basic Principles of RR

2:24Summary

CONTINUOUS PLAY

1:17:59Topic 606 - Topic 606: Revenue Recognition for Software and Technology Full Video

SUPPORTING MATERIAL

PDFSlides: Topic 606: Part 1: Revenue Recognition for Software and Technology

PDFTopic 606: Part 1: Revenue Recognition for Software and Technology Glossary/Index

REVIEW AND TEST

quizREVIEW QUESTIONS

examFINAL EXAM

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Revenue Recognition For Software And Technology

Learning Objectives

46 Reviews (204 ratings)Reviews

Prerequisites

Education Provider Information

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