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Technology Alerts — Challenges Associated With Applying the New Revenue Standard

Nonrefundable Up-Front Fees in Software Arrangements (October 2019)

Technology Alert
October 23, 2019
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Technology Highlights — Challenges Associated With Applying the New Revenue Standard — Nonrefundable Up-Front Fees in Software Arrangements

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
See ASC 606-10-55-50 and 55-51.
3
See ASC 606-10-25-3 and 25-4 as well as paragraphs BC50 and BC391 of FASB Accounting Standards Update (ASU) No. 2014-09, Revenue From Contracts With Customers. In addition, see TRG Memo No. 10, Contract Enforceability and Termination Clauses, and TRG Memo No. 48, Customer Options for Additional Goods and Services.
4
The contract does not give the customer a material right on an annual basis since the annual renewal provision is priced at the SSPs of the term license and PCS.