Disclosure Requirements and Considerations Under the New Revenue Recognition Standards

Morris, Manning & Martin and Habif, Arogeti & Wynne join forces to provide a unique legal and accounting perspective on changes to new revenue recognition standards for tech companies. 

Disclosure Requirements and Considerations Under the New Revenue Recognition Standards from MMMTechLaw on Vimeo.

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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 More


Software Case Highlights Criminal Exposure for Revenue Recognition of Software Sales

Former chief financial officer of Network Associates, Inc. (“NAI”), appeals his convictions for securities fraud and making materially false statements to auditors. The government alleged that NAI, under CFO’s supervision, violated generally accepted accounting principles (“GAAP”) by recognizing revenue from certain software sales earlier than it should have. CFO was indicted for concealing the allegedly improper accounting from NAI’s outside auditors and for filing reports with the Securities and Exchange Commission that, because of NAI’s accounting, allegedly misstated revenue in certain reporting periods between 1998 and 2000. CFO argued that no jury could have found him guilty beyond a reasonable

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From the Archives: “Revenue Recognition Bulletin Vol. 1 No. 1”

By Paul Arne and Ross Albert

This Morris, Manning & Martin Revenue Recognition Bulletin reviews case developments in the Rev Rec area and identifies practical suggestions for addressing these developments.

On January 12, 2004, Computer Associates International (“CA”), one of the world’s largest software companies, announced that it had received a so-called “Wells Notice” from the staff of the SEC. The SEC’s Division of Enforcement issues a Wells Notice when it plans to recommend an enforcement

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