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Technology Alerts — Challenges Associated With Applying the New Revenue Standard

Blend-and-Extend Modifications Related to a Cloud-Based or Hosted Software Arrangement (December 2019)

Technology Alert
December 2, 2019
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Technology Highlights — Challenges Associated With Applying the New Revenue Standard: Blend-and-Extend Modifications Related to a Cloud-Based or Hosted Software Arrangement

Footnotes

1
For titles of FASB Accounting Standards Codification (ASC) references, see Deloitte’s ”Titles of Topics and Subtopics in the FASB Accounting Standards Codification.”
2
In this publication, it is assumed that the SaaS arrangement is accounted for as a service contract because the customer does not have the ability to take possession of the underlying software license on an on-premise basis.
3
Cumulative adjustments to revenue under ASC 606-10-25-13(b) are not common for these types of modifications of SaaS arrangements because the services provided after the modification are typically distinct from those transferred before the modification. Therefore, this publication does not focus on modifications that would result in an adjustment to revenue.