FASB Revenue Recognition ASU 2014-09: Impact on the Software Industry


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Revenue recognition standard ASU 2014-09 was issued by FASB to provide clearer guidance and improve how revenue is reported on financial statements. This has significantly impacted several industries, especially the software industry. It is discussed what FASB sought to change by issuing ASU 2014-09, and why ASU 2014-09 was issued. Software companies face significant challenges regarding revenue, so the new standard significantly impacted them. In addition, there was an analysis done regarding whether the standard helped provide better quality information for users of software companies’ financial statements. Both professional research and the financial statements of two software companies were analyzed to determine this information. It was discovered ASU 2014-09 has ultimately improved the recognition of revenue for software companies by providing better quality information for users of financial statements, as the benefits of a consistent framework for revenue recognition outweigh the drawbacks of the potential for more aggressive revenue recognition.



Accounting, FASB, ASU 2014-09, Revenue Recognition, Microsoft, Commvault, Software