Accounting Memo
Issue
Whether the CloudScale SaaS arrangement contains a single combined obligation or multiple distinct obligations under ASC 606.
Analysis
The arrangement contains a single obligation two distinct obligations under ASC 606-10-25-21. Implementation services are capable of being distinct from the subscription.
Subscription revenue should be recognized ratably over 36 months per the input method, consistent with the transfer of control.
Conclusion
Contract liability adjusted from $12.4M $14.1M.