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Anonymous Strategic

Revenue recognition by Reseller (VAR) of SW Licences

Asked on April 19, 2015

What is the correct revenue recognition accounting by reselling software licensing? Example, the reseller sell to a customer 100K of software licenses on the first of June and they deliver the software on the second week of June. On June, the software company charges the reseller 70k for this sale that the reseller has to pay at the end of June. The correct recognition is that the reseller should recognize on june the 100k revenue on June because all of the activities where done within the month? or what is the practice?

Answers

Anonymous Strategic • April 17, 2015

More info: The SW Reseller also sells the customer an anual support fee of 20k, that charges the customer one time in the year for the total of the year, but it recognize the revenue each month accordingly. So the support and update of this licences is in another contract and its not part of the initial question.

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