A shifting software revenue recognition landscape?

Insights on potential impacts of IFRS and US GAAP convergence

Revenue recognition is a complex issue for software companies. As the US marketplace begins discussing the possibility that IFRS will one day be used instead of US GAAP, a need to analyse the compatibility of certain US GAAP positions with those of IFRS arises.

This paper discusses the existence of written arrangement, multiple element contract and treatment of future obligations, accounting for post-contract customer support, rules on time-based licenses, and the question of discounts when applying the residual method.