Revenue Recognition – Milestone Method
Does your business provide research and development services using a milestone arrangement? The new FASB standards in ASU 2010-17 provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone method. Research and development arrangements frequently include payment provisions whereby a portion or all of the consideration is contingent upon milestone events such as successful completion of phases in a drug study or achieving a specific result from a research and development effort. An entity that recognizes these milestone payments as revenue in their entirety upon achieving the related milestone is using the milestone method. Continue reading »
Updated FASB Guidance for Revenue Arrangements That Include Software Elements
Does your business sell a product that includes a software component that is essential to the product’s overall functionality? If so, the newly approved FASB Accounting Standards Update (ASU) (2009-14) provides guidance that will be applied prospectively for revenue arrangements entered into or materially modified for fiscal years beginning on or after June 15, 2010, and early adoption is permitted.
The FASB standards require that all hardware components of a tangible product containing software components be excluded from software revenue recognition guidance Continue reading »
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