Case 14 3
Hoang Thi Thanh Ha - 13200154
Case 14-3
Coconut Telegraph 1. Is Coconut’s February 1, 2012, arrangement with Buffett within the scope of ASC 985-605?
ASC 985 -605 Software — Revenue Recognition “provides guidance on when revenue should be recognized and in what amounts for licensing, selling, leasing, or otherwise marketing computer software.” It defines “ Software arrangements range from those that provide a license for a single software product to those that, in addition to the delivery of software or a software system, require significant production, modification, or customization of software.” (ASC 985-605-05-3 ). And the Scope and Scope exception is in ASC 985-605-15 (The Scope in 985-605-15-13 and Scope exception 986-605-15-14)
In accordance in ASC 985-605-15-3, “The guidance in this Subtopic applied to the following transactions and activities:
a. Licensing, selling, leasing, or otherwise MARKETINGcomputer software.
b. Subparagraph superseded by Accounting Standards Update No. 2009-14
c. The software and software-related elements of arrangements that include software that is more-than-incidental to the products or services in the arrangement as a whole. Indicators that software is more-than-incidental to the products or services in an arrangement as a whole include (but are not limited to): 1. The software is a significant focus of the marketing effort or is sold separately.
2. The vendor is providing postcontract customer support.
3. The vendor incurs significant costs that are within the scope of Subtopic 985-20.
In such arrangements, the guidance in this Subtopic applies to the software and software-related elements in the arrangement unless a scope exception in paragraph 985-605-15-4 is present. Software-related elements include software products and services such as those listed in paragraph 985-605-25-5.A service is within the scope of this Subtopic if software in the arrangement is essential to the functionality of that service”
In this
Case 14-3
Coconut Telegraph 1. Is Coconut’s February 1, 2012, arrangement with Buffett within the scope of ASC 985-605?
ASC 985 -605 Software — Revenue Recognition “provides guidance on when revenue should be recognized and in what amounts for licensing, selling, leasing, or otherwise marketing computer software.” It defines “ Software arrangements range from those that provide a license for a single software product to those that, in addition to the delivery of software or a software system, require significant production, modification, or customization of software.” (ASC 985-605-05-3 ). And the Scope and Scope exception is in ASC 985-605-15 (The Scope in 985-605-15-13 and Scope exception 986-605-15-14)
In accordance in ASC 985-605-15-3, “The guidance in this Subtopic applied to the following transactions and activities:
a. Licensing, selling, leasing, or otherwise MARKETINGcomputer software.
b. Subparagraph superseded by Accounting Standards Update No. 2009-14
c. The software and software-related elements of arrangements that include software that is more-than-incidental to the products or services in the arrangement as a whole. Indicators that software is more-than-incidental to the products or services in an arrangement as a whole include (but are not limited to): 1. The software is a significant focus of the marketing effort or is sold separately.
2. The vendor is providing postcontract customer support.
3. The vendor incurs significant costs that are within the scope of Subtopic 985-20.
In such arrangements, the guidance in this Subtopic applies to the software and software-related elements in the arrangement unless a scope exception in paragraph 985-605-15-4 is present. Software-related elements include software products and services such as those listed in paragraph 985-605-25-5.A service is within the scope of this Subtopic if software in the arrangement is essential to the functionality of that service”
In this