Revenue Recognition for Multiple Deliverable Arrangements (#105)
/In this podcast episode, we cover recent changes in the requirements for revenue recognition for multiple deliverable arrangements. Key points are:
-
There have been increased disclosure requirements, both in regard to quantitative and qualitative information.
-
Disclose the nature of these arrangements and the timing of their performance.
-
Disclose any termination provisions.
-
Disclose the factors, inputs, and assumptions involved in setting prices.
-
State the timing of revenue recognition.
-
The relative selling price method is mandated, using vendor-specific objective evidence. If this evidence is not available, then use third party objective evidence; if that is not available, then estimate what the selling price would be.
-
There are a dozen specific implementation examples in the FASB guidance.