Is there any basis under UK GAAP / FRS 102 section 23 for a company to recognise revenue on invoice date for software maintenance contracts of a year or multi-year (invoiced and payable in advance quarterly, annually or multi-yearly), using their logic that all sales costs are written off at the same time, there is no additional cost to service beyond existing overhead, the contracts are non-cancellable and the business is a going concern?
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http://www.frc.org.uk/getattachment/c6a8a982-2c6a-4732-8ad7-43ca9b2ff6e6...
Last page, right and side of the table.
Service contracts should be recognised over the period of the contract on a straight line basis unless there is any proof over stage of completion.
With regards to the costs, these need to be assessed on an individual basis. Some costs may need to be recorded as prepayments and released to the profit in the following year.
Hope this helps.
John