Chapter 9 Software Entities
Notice to Readers
This chapter presents accounting implementation issues developed to assist management of software entities in applying FASB Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers , and related interpretations from the FASB/IASB Joint Transition Resource Group for Revenue Recognition (TRG).
The AICPA Software Entities Revenue Recognition Task Force identified and developed these accounting issues, and the AICPA Revenue Recognition Working Group and AICPA Financial Reporting Executive Committee (FinREC) approved them. They are a source of nonauthoritative accounting guidance for nongovernmental entities.
The accounting implementation issues have been organized within this chapter as follows:
• In relation to the five-step model of FASB ASC 606, when applicable,
— Step 1: "Identify the contract with a customer"
— Step 2: "Identify the performance obligations in the contract," starting at paragraph 9.2.01
— Step 3: "Determine the transaction price," starting at paragraph 9.3.01
— Step 4: "Allocate the transaction price to the performance obligations in the contract," starting at paragraph 9.4.01
— Step 5: "Recognize revenue when (or as) the entity satisfies a performance obligation," starting at paragraph 9.5.01
• By revenue stream
• As other related topics
The following table outlines the accounting implementation issues discussed in this chapter: