Revenue Recognition-Software - an overview

Scholary Paper aus dem Jahr 2004 im Fachbereich Wirtschaft - Revision, Prüfungswesen, einseitig bedruckt, Note: 1,0, Universität Augsburg (Lehrstuhl für Wirtschaftsprüfung und Controlling), Veranstaltung: US-GAAP Seminar, 27 Eintragungen im Literaturverzeichnis, Sprache: Englisch, Anmerkungen: The paper covers US-GAAP specific regulations of software revenue recognition. The standards used in this paper consist of SOP 97-2 and SOP 98-9. , Abstract: Several years ago software vendors had the possibility to implement very different accounting practices for their financial statements especially in the area of revenue recognition. About 15% of the companies, covered by a survey of ADAPSO in 1983, took use of the ability to blow up revenue and recognized it early upon signing of the contract. Since then the rules have changed a lot. New accounting standards were introduced and software companies are now limited in how and when they can recognize revenue. This leads to the ability to compare financial statements among competitors more easily and reflects the current financial condition in a better way. The aim of this paper is to provide an overview about US-GAAP's regulations of software revenue recognition. Therefore the criteria of SOP 97-2 and SOP 98-9 are explained and multiple-element arrangements are also described in detail.