As software becomes more ubiquitous, many CFOs must now confront the nightmare of revenue recognition.
Alix Stuart, CFO Magazine
January 1, 2008
Allocating multiple deliverables such as software to revenue is tough enough, but now throw in a customer solution that contains leasing, a situation that any CFO with a captive finance company faces. Under FAS 13, the finance rate to be allocated is a function of equipment fair value, which, arguably, could be a function of the finance rate (and also is impacted by the value of software, maintenance, and other services). The whole thing becomes very circular and difficult to implement, as Xerox unhappily discovered.
Posted by Shawn Halladay | January 10, 2008 02:06 pm
I am currently working my way through a book on string theory. I figure once I master this controversial theory I may be ready to tackle the equally controversial Revenue Recognition Guide 2008. When I switched from pure science to accounting several decades ago I never dreamt that accounting would end up with probabilistic models close to as complex as quantum mechanics.
Posted by John Laurie | January 07, 2008 09:09 am© CFO Publishing Corporation 2009. All rights reserved.