Technology industry revenue recognition update
Join the Ernst & Young Global Technology Center and a panel of experienced Ernst & Young LLP professionals for a webcast to discuss the impact of the recent activities of the Emerging Issues Task Force (EITF) on technology companies. On September 10, 2009, the EITF finalized EITF 08-1, "Revenue Arrangements with Multiple Deliverables" and EITF 09-3, "Certain Revenue Arrangements That Include Software Elements". Both of the EITFs are expected to be ratified by the FASB later this month. In this webcast, panelists will discuss aspects of the new EITFs that will most likely affect technology companies, with particular emphasis on:
- Determination of separate units of account
- Allocation of transaction consideration, including estimated selling price
- Implementation and change management issues
- Practical considerations of evaluating which software elements will be scoped out of Statement of Position (SOP) 97-2, Software Revenue Recognition
- Transition considerations
- Disclosure considerations
Revenue is a significant item for all technology reporting companies, and any changes in the revenue recognition model can have a fundamental impact on the company's results. The recent issuance of EITF 08-1 is expected to have a significant impact on the way that a company allocates the arrangement consideration among its elements in multiple-element arrangements. We expect that EITF 08-1 will allow more flexibility in identifying and accounting for separate units of accounting for a multiple-element arrangement currently accounted for under EITF 00-21. The recent issuance of EITF 09-3 is expected to result in many transactions involving both a tangible product and software to be scoped out of SOP 97-2, and, as a result, accounted for as multiple-element arrangements under EITF 08-1.