In This Issue
Welcome to Softrax eNews, the Inside Track on Revenue Management.
News - January 2010
After much deliberation FASB issued new guidance for revenue recognition on two highly controversial issues: Is there an alternative to VSOE and do software components of tangible products trigger software revenue recognition rules? FASB’s new Accounting Standards Update, ASU 2009-13 and ASU 2009-14 (formerly know as EITF 08-1 and EITF 09-3), take those issues head on.
EITF 00-21 Replaced – New ASU 2009-13 (EITF 08-1)
A new paper from Softrax and RevenueRecognition.com. ASU 2009-13 introduces a “selling price” hierarchy for multiple-deliverable arrangements and for the first time allows for management selling price estimates in case where no VSOE (Vendor Specific Objective Evidence) or third-party evidence can be determined. This also results in the elimination of the residual method, since now price estimates for all elements of an arrangement are possible. ASU 2009-13 will be effective for fiscal years beginning June 15th 2010 and early adoption is possible.
Seismic Shift in SOP 97-2 - New ASU 2009-14 (EITF 09-3)
A new paper from Softrax and RevenueRecognition.com. ASU 2009-14 tackles another hotly debated item: Should the existence of a software component in a tangible product trigger the application of software revenue recognition accounting rules? Manufactures of cell phones, computer hardware, medical devices, and even cars have had to determine if included software was merely incidental or really essential to the whole product. Now ASU 2009-14 specifically excludes such types of products from the use of software revenue recognition rules. This removes the VSOE requirement and allows vendors to use the estimated selling price and multiple-deliverable arrangements guidance for revenue recognition. ASU 2009-14 will also be effective for fiscal years beginning June 15th 2010 and early adoption is possible.
We invite you to review these and other resources that will help you better prepare for these critical upcoming changes.
Warm Regards,
Softrax
Live Webcast –Software M&A: 2009 Wrap-Up, 2010 Forecast, and New Exit Perspectives
On Tuesday, January, 26th at 1:00 p.m. Eastern Time, Ken Bender, founder & Managing Director of Software Equity Group, provides an in-depth look at the improving M&A climate, and how sellers can begin to plan for a strong exit.
Laying the Foundation for Automating Revenue Accounting
Automating revenue recognition processes provides tangible improvements. This white paper from BearingPoint explains why companies should automate their revenue processes, and how to successfully manage the implementation process from strategy to scope, design, and execution.
EITF 00-21 Replaced – New ASU 2009-13 (EITF 08-1)
- Featured on RevenueRecognition.com
ASU 2009-13 introduces a “selling price” hierarchy for multiple-deliverable arrangements and for the first time allows for management selling price estimates in case where no VSOE or third-party evidence can be determined – resulting in the elimination of the residual method. ASU 2009-13 will be effective for fiscal years beginning June 15th 2010 and early adoption is possible.
Seismic Shift in SOP 97-2 - New ASU 2009-14 (EITF 09-3)
- Featured on RevenueRecognition.com
ASU 2009-14 (formerly known as EITF 09-3) tackles a hotly debated item: Should the existence of a software component in a tangible product trigger the application of software revenue recognition accounting rules? ASU 2009-14 will also be effective for fiscal years beginning June 15th 2010 and early adoption is possible.
EITF 08-9: Milestone Method of Revenue Recognition
- Featured on RevenueRecognition.com
On April 7, 2009 the EITF published a draft abstract of EITF 08-9, "Milestone Method of Revenue Recognition." If approved, EITF 08-9 will introduce a new method of revenue recognition that allows vendors to recognize the revenue associated with a contractual incentive or bonus at the time that obligation is fulfilled instead of systematically over the time of the contract.
EITF 08-1 FINALIZED: Planning for Implementation
Renowned Revenue Recognition expert, Tony Sondhi, discusses the critical issues and implementation challenges facing companies as they prepare to adopt this new standard.
RevenueRecognition.com Survey: A New Model for Revenue Recognition
RevenueRecognition.com recently surveyed 515 companies about the FASB/IASB proposed contract-based model for revenue recognition. This model represents a fundamental change for revenue accounting and comes with many questions about applicability and feasibility. This survey shows broad support for the key concepts with some strong dissent from industries such as construction, defense, engineering, services, and software.
How to Get the Most Out of your Business During Challenging Times
Learn how you can deploy key business improvement solutions that help you maximize your revenue and optimize your processes.
Automating Complex Billing and Revenue Recognition
Managing rapid growth, complicated pricing, and changes to their business model required this mobile messaging provider to eliminate manual accounting processes. The deployment of a Softrax solution reduced billing time from two weeks to two days, improved cash flows and the accuracy of revenue processes, freed personnel to spend time on more meaningful activities, helped prepare for a new acquisition and enabled them to scale without additional personnel.
Upcoming Educational Seminars
2010 Executive Seminars on Revenue Recognition
Softrax is a sponsor of the following executive education providers and these CPE accredited courses.
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Currently a member of the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board (FASB), Dr. Sondhi's events are designed for CFOs, controllers, financial reporting managers and others responsible for understanding and applying current accounting rules. |
Upcoming Events Schedule: |
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EITF 08-01 Implementation and Adoption Issues |
EITF 09-03 Implementation and Adoption Issues |
