Often, considerable judgment is required to determine whether contract accounting applies or whether services and software elements can be invoiced separately. It is therefore important for a software company to initiate a dialogue with its accountants and lawyers at an early stage when structuring a licensed software/services agreement, in order to assess whether the contract statement applies to the agreement. Beware of specified upgrade rightsThe new SOP treats each specified upgrade right as a separate item to which revenue should be allocated8 If the client`s goal is to generate revenue at an early stage, then the lawyer should ensure that the client is able to determine the fair value of the upgrade right. Therefore, the customer benefits from antivirus protection which is a single service obligation, which includes the license for the software and updates. To illustrate this point, look at scenario 3 in the example described above. In addition, functional intellectual property offers a right to use intellectual property, since the continuation of company A`s activities does not change the functionality of the pharmaceutical formula. Therefore, none of the criteria of CSA 606-10-55-62 are met. The turnover is recorded on a date on the date. In this example, license rights should not be recognized until Insureco Accountsoft is accepted. Note that if the above example is modified so that Insureco`s acceptance tests last 30 days or less after Accountsoft`s delivery and Solosoft is able to estimate the percentage of customers who return Accountsoft for non-acceptance (through historical evidence), Solosoft may be able to collect revenue prior to acceptance of the software. The new SOP provides for a short-term right of return, such as. B a 30-day money-back guarantee should not be considered a withdrawal privilege; and related notifications should be in accordance with AFSB Declaration No. 4815 (see the “Decision Point #13” section in Part 1 of this Article, for discussion on revenue recording in accordance with FSB Statement No.
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