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Revenue from a software licence is typically recognised at a point in time (that is, at contract inception), while revenue from a SaaS arrangement is typically recognised over time. Therefore, questions have arisen on accounting for the conversion of a point-in-time licence to a service provided over time.
- Revenue recognition: A Q&A guide for software and SaaS entities - PwC
Following are the eight issue areas addressed in the Q&A...
- Revenue recognition: A Q&A guide for software and SaaS entities - PwC
16 gru 2022 · The guide for recognising revenue in the software industry is our collected insight on the application of International Financial Reporting Standards (IFRS) in this industry.
Following are the eight issue areas addressed in the Q&A guide for software and SaaS entities: Identifying the contract. Identifying the performance obligations. Determining the transaction price. Allocating transaction price. Recognizing revenue.
Revenue recognition: A Q&A guide for software and SaaS entities. There are unique considerations when accounting for software and SaaS arrangements. PwC's latest Q&A guide helps these companies navigate common issues.
Revenue recognition within the software industry has historically been highly complex with much industry-specific guidance. The new revenue standards (ASC 606 and IFRS 15, Revenue from Contracts with Customers) replace industry-specific guidance with a single revenue recognition model.
One of the most significant changes that affects the industry is the recognition of more revenue ‘upfront’ in the scenario where software is delivered and control passes to the customer. This document provides additional insight into some of the key judgements facing the industry during the implementation phase.
Example – Costs for the customisation of a SaaS source code A bank implements a SaaS agreement. Since the basic version does not cover all regulatory requirements, the SaaS provider customises the base solution and includes certain functionalities by modifying the source code as follows:
