Revenue Recognition for Multiple Deliverable Arrangements (#105)
/In this podcast episode, we cover recent changes in the requirements for revenue recognition for multiple deliverable arrangements. Key points are:
There have been increased disclosure requirements, both in regard to quantitative and qualitative information.
Disclose the nature of these arrangements and the timing of their performance.
Disclose any termination provisions.
Disclose the factors, inputs, and assumptions involved in setting prices.
State the timing of revenue recognition.
The relative selling price method is mandated, using vendor-specific objective evidence. If this evidence is not available, then use third party objective evidence; if that is not available, then estimate what the selling price would be.
There are a dozen specific implementation examples in the FASB guidance.