Revenue recognition

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Sunny (Querist)
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27 February 2014 Dear experts plz tell me revenue recognition criteria for Software Companies? What kinds of contracts does a software company enter into with its clients? plz reply urgent Thanks in advance

Nikhil Kaushik online

Nikhil Kaushik online

(Expert)
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27 February 2014 revenue recognition shall depend on client wise contracts.

there could be outright sale contracts where the revenue is billed in one shot

then there could be fixed AMCs where revenue recognition is normally done on regular period as per the terms agreed in the contract.

then there could be hourly billing contracts where revenue is normally recognised as and when the work is certified by the client or as per the terms agreed.

What you need to do is to go through the each contract document.

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