The development and negotiation of tripartite contracts also tends to cost more. It is not uncommon to see unwanted errors and ambiguities. If a customer also needs the reseller`s services, they can be added as part of another contract between the parties. A customer may want a creditor to be added to the contract between a dealer and a customer. This idea is not necessarily desirable and should be avoided as much as possible. If a customer wishes to maintain a direct relationship with a credit provider, it is preferable for the reseller to assist and instead act as a referral partner. I. IntroductionRespect in October 1997, the American Institute of Certified Public Accountants (AICPA) adopted a new set of guidelines for the recognition of software transaction revenue. The guidelines entitled “Statement of Position 97-2, “Software Revenue Recognition” (called in this article “New SOP”) replace the statement of position 91-1 (“SOP 91-1”) on the same subject. The new SOP provides for the planned implementation of its guidelines for operations that will be closed in the fiscal years from December 15, 1997. These policies will have a significant impact on U.S. software companies and foreign software companies that submit stock exchanges in the United States. The new SOP aims to address major software licenses and business issues that are not included in the SOP 91-1 program and to provide clearer guidelines to reduce the inconsistent use of SOP 91-1 in software transactions.
Purpose. A lawyer who advises technology companies in software transactions plays a key role in his client`s ability to identify revenue. A software agreement will be the first place where an accountant will be visible when determining the accounting processing of a software transaction. In addition, some of the basic revenue criteria for revenue registration depend on the structure and conditions of the software agreement. The purpose of this article is to provide the lawyer with practical guidance on how to advise clients on new revenue recognition policies. Below is a process that the technology lawyer might consider with his clients (usually in discussions with the Chief Financial Officer or the Technology Client Audit Committee): if there are “significant” changes in the software or if the services are “essential” for other elements of contract accounting. DECISION POINT #4 — Is there convincing evidence of an agreement? Accounting rules. One of the four basic criteria for the detection of returns under the new SOP can only be accounted for when “convincing evidence of an agreement is available,” as the usual practice of the software provider.10 If the seller has a common business practice of using written contracts, 11 If the seller does not normally enter into contractual agreements with his customers (i.e., accept orders via an online, telephone or narrow transaction), the seller must have other evidence to document the transaction. B for example, an online order or authorization.12Lawyer asks.