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Seismic Shift in SOP 97-2 - New ASU 2009-14 (EITF 09-3)

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. Manufactures of cell phones, computer hardware, medical devices, 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.

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