Changes to Revenue Recognition in the Technology Industry

Since the issuance of the original ASU 2014-09, Revenue from Contracts with Customers, there has been several changes to that guidance, and additional limited changes are in process. The degree to which a particular entity’s revenue will be affected depends on its own facts and circumstances. The new guidance will require the entities in the technology industry—including software companies and providers of software as a service [SaaS]—to evaluate whether any changes are needed to their current revenue and financial reporting processes and systems to comply with the new guidance. This will undoubtedly include substantive involvement by more than just those involved in the accounting function.