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URL:  https://boards.fool.com/and-yes-with-any-subscription-sale-including-34114882.aspx

Subject:  Re: Mid-month update. What I've done and why Date:  1/21/2019  7:11 AM
Author:  rockleppard Number:  50709 of 54929

And yes, with any subscription sale, including SaaS, revenue is recognized pro rata over the subscription period regardless of the cash flow terms.

This is actually incorrect under the new revenue recognition rules adopted by public and private companies (ASC 606 under GAAP). Regardless of cash flow timing, subscription sales (bundled software & support) under a term, on-premise licensing model are bifurcated into software and support components based on stand alone selling price relative values and then the software (larger component) is recognized up front upon initial delivery (assuming all other revenue recognition criteria are met). The support (smaller component) is recognized ratably over the associated licensing term.

This is a major change as previously term licenses (bundled software and support) were in fact recognized entirely on a ratable basis over the related licensing term.

-Rockleppard
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