Does EITF 08-1 apply to any companies/industries that 00-21 would not have applied to?

Michael Jameson's Profile
Michael Jameson (VP Finance, Undisclosed)
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Michael Jameson
Title: VP Finance
Company: Undisclosed
| Oct 4, 2010

In other words, if 00-21 did not apply to my company before, would 08-1 (a.k.a. ASU 2009-13, a.k.a. Subtopic 605-25 of the new codification) now apply? Are any additional industries or multi-element deal structures covered by the new rules?

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Tim Perotti's Profile
Tim Perotti (Assurance and Advisory Partner, Frank, Rimerman + Co. LLP)
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Tim Perotti
Title: Assurance and Advisory Partner
Company: Frank, Rimerman + Co. LLP
| Oct 3, 2010

Hi Michael,
Thank you for the question. As issued, EITF 08-1 applied to all mulitple element arrangements, introducing the concept of Estimated Selling Price (ESP) absent VSOE or Third Party Evidence, for all industries with the exception of software arrangements under 97-2 which were specifically excluded. EITF 09-3 allowed for the inclusion into the guidance under EITF 08-1 for companies where software is sold with hardware where hardware is an essential component of the product (and where it is marketed together) among other requirements. As you note in your question, Topic 605-25 under the codification includes the guidance in EITF 08-1 and 09-3. I am not sure of your industry, but if your revenue model includes multiple elements within single arrangements and is not software related, Topic 605-25 most likely applies. Please feel free to shoot me an email at tperottiatfr-co [dot] com or give me a call at (415) 439-1147 if you would like to discuss further.

Best Regards,
Tim

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