"VSOE" is necessary to separately recognize revenue in multiple-element contracts for:
A) All service contracts.
B) All product contracts.
C) All contracts that involve at least one non-software element.
D) Software contracts.

Question

Quizplus · Accepted Answer

VSOE, or Vendor Specific Objective Evidence, is specifically related to the accounting practices for recognizing revenue in software contracts. It is necessary for separately recognizing revenue in multiple-element software contracts, where the contract includes both software and non-software elements (such as services). This method helps in determining the fair value of each element for revenue recognition purposes.

"VSOE" Is Necessary to Separately Recognize Revenue in Multiple-Element Contracts