|Industry: ||Technology |
|Annual Revenue: ||>$100 million |
|Geographic Footprint: ||National |
|Ownership Structure: ||Private Equity Owned |
A software as a service (SaaS) company needed to understand how the new revenue
recognition accounting standard would affect its operations in order to address questions
from its board and establish a meaningful operating budget for the next financial year.
The requests came early in the accounting standard’s roll out, so the company had little
interpretative guidance to help with its evaluation.
Our team reviewed revenue schedules and over 100 contracts for the SaaS company. We
worked closely with sales and operations teams to understand the nature of the promises in
those contracts and the standalone selling prices of the contracts’ performance obligations.
The knowledge we had of the SaaS industry and the revenue recognition standard helped
identify a new performance obligation: a material renewal right within the company’s
contracts. We also provided input on the material right’s standalone selling price and revenue
With our help, the company caught potential implementation issues before its Jan. 1, 2019,
revenue recognition adoption date, put forth a meaningful 2019 budget and addressed its
board’s questions about the impact of the new standard. We also provided documentation
that satisfied the revenue recognition adoption information requests made by the SaaS
company’s Big 4 audit firm.
Published on April 25, 2019
© Copyright CBIZ, Inc. and MHM. All rights reserved. Use of the material contained herein without the express written consent of the firms is prohibited by law. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.
CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly-traded and privately-held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ). MHM (Mayer Hoffman McCann P.C.) is an independent CPA firm that provides audit, review and attest services, and works closely with CBIZ, a business consulting, tax and financial services provider. CBIZ and MHM are members of Kreston International Limited, a global network of independent accounting firms. This publication is protected by U.S. and international copyright laws and treaties. Material contained in this publication is informational and promotional in nature and not intended to be specific financial, tax or consulting advice. Readers are advised to seek professional consultation regarding circumstances affecting their organization.