When accounting for multiple-element arrangements, GAAP indicates that sellers can separately record revenue for part of an arrangement even if the part does not have value to the customer on a stand-alone basis.

Question

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Under GAAP, revenue for each element in a multiple-element arrangement can only be recognized when it is both separable from other elements (meaning it has standalone value) and if the seller has delivered that element to the customer.

When Accounting for Multiple-Element Arrangements, GAAP Indicates That Sellers Can