Quiz 06.79 – T/F Revenue Recognition Timing for Computer Software Sales
Intermediate Accounting
Spiceland, Nelson, and Thomas
10th Edition
Revenue from computer software sales is recognized at the time of sale.
Revenue from computer software sales is recognized at the time of sale.
The typical approach for revenue allocation in a multiple-element contract is based on the relative selling prices of each part.
Objective proof of separate prices is mandatory for multi-element software contracts, while estimated selling prices are acceptable for other multi-element contracts in compliance with U.S. GAAP.
Franchise fee revenue recognition depends on evaluating both substantial performance and fee collection expectations.
The recognition of initial franchise fees takes place on the date of receipt.
Revenue recognition for each element in a multiple-element software arrangement is based on the individual prices stated for each element in the contract.
GAAP allows sellers to recognize revenue separately for a portion of a multiple-element arrangement, even if that portion has no stand-alone value to the customer.
IFRS offers comprehensive guidance for accounting revenue in relation to contracts with multiple elements.
Which step is involved in the process of recognizing revenue?
What is the step excluded from the revenue recognition process?