Common ASC 606 Issues: Software Entities
Keywords
ASC 606 adoption, software revenue recognition, industry guidance
Abstract
In 2018, the Accounting Standards Codification (ASC) Topic 606 became effective for all public companies. This major overhaul of revenue recognition has affected almost every industry, and software companies are no exception. This article provides a quick review of the key issues software companies must consider when applying the standard.
The AICPA and the Big Four accounting firms have written industry-specific revenue recognition guides that may be useful to software companies. For direct access to selected guides, see:
- AICPA: Audit & Accounting Guide—Revenue Recognition
- EY: Technical Line: How the revenue standard affects technology entities
- KPMG: Revenue for Software and SaaS—Q&A
- PWC: In depth: Revenue: Implementation in the software sector
For each of the issues we examine below, we also provide references to related RevenueHub articles that dig deeper into those issues. See our RevenueHub article, The Five-Step Method, for more general information.
Original Publication Citation
Common ASC 606 Issues: Software Entities (T. J. Wilks, A. Jentgen, and S. Driscoll), RevenueHub, March 8, 2018, updated March 1, 2021. (22,400 unique views as of Jan. 13, 2023)
BYU ScholarsArchive Citation
Wilks, Jeff; Jentgen, Alexia; and Driscoll, Steven, "Common ASC 606 Issues: Software Entities" (2021). Faculty Publications. 8655.
https://scholarsarchive.byu.edu/facpub/8655
Document Type
Peer-Reviewed Article
Publication Date
2021
Publisher
RevenueHub
Language
English
College
Marriott School of Business
Department
Accountancy
Copyright Use Information
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