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Please give examples of SAAS model revenue recognition related to multi-element arrangements

 

"Please give examples of SAAS model revenue recognition related to multi-element arrangements."

This question was asked at a recent webinar, now available on-demand:

"A Deep Dive into Multiple-Element Revenue Recognition"

Please add your thoughts about it below. Thanks!

Answers

Topic Expert
Bob Scarborough
Title: CEO
Company: Tensoft, Inc.
(CEO, Tensoft, Inc.) |

The question appears to be a request for examples of multi-element sales in a SAAS model? If so you can consider a setup fee plus a subscription, or multiple subscriptions with different terms, or a subscription combined with a usage based revenue model, or training programs plus subscriptions, or any combination of the above. Multi-element sales are more common in B2B SAAS models than consumer models – but even in consumer models multi-element sales are possible.

A sale with multiple related elements – even for SAAS companies – requires a fair value assessment and revenue allocation among the elements to meet the requirements for US GAAP.

Bob Scarborough
www.tensoft.com

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