When accounting for multiple-element software arrangements, the revenue for each element is based on the separate prices stated for each element in the software contract.

Question

Quizplus · Accepted Answer

In multiple-element software arrangements, the revenue for each element is often recognized based on the relative fair value of each element, not necessarily the separate prices stated in the contract, especially when standalone prices are not available or the contract price does not reflect the standalone selling prices.

When Accounting for Multiple-Element Software Arrangements, the Revenue for Each