SaaS is Different – An Accounting Primer for SaaS Companies

Services that have standalone value to the customer apart from the hosted software services can generally be recognized when performed. If, however, the services do not have standalone value, then they would generally be treated as set-up fees, and recognized over the longer of the initial contract period or the period the customer is expected to benefit from payment of the up-front fees….However [the] requirement to establish the fair value of hosted services was recently eliminated, making it significantly easier for SaaS companies that provide other services with standalone value to recognize revenue attributable to those services when performed. Read Article.