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Software

In the fast-evolving software world, you can’t afford to get complacent. Either you are on technology’s cutting edge or you may be out of business. Today’s software producer confronts speed-of-light change, ranging from Internet-driven sales and marketing opportunities to ever-reduced development-and-release cycle times, along with the business and financial implications of evolving delivery models such as software as a service (SaaS) and Open Source.

Every day, your software enterprise faces critical challenges, such as:

  • Innovation — you must be dedicated to proactive, high-quality research and product development, and you must anticipate your customers’ demands with speed, accuracy and agility.
  • Competition — your products must appeal in terms of cost, need and functionality; you must achieve faster development-and-release cycles; and you must simultaneously address the globalization of your markets and the threats of new, low-cost competitors in Asia, Europe and Latin America.
  • Enterprise management — you must manage your business for long-term profitability and stakeholder value while attracting and retaining a quality workforce, minimizing corporate risk and successfully complying with increasingly restrictive domestic and international regulations.

Grant Thornton’s Technology Industry practice brings unparalleled industry understanding and the technical capability to help you achieve sustained strategic advantage. We provide the business and financial knowledge that your organization needs to succeed in the dynamic, highly competitive software industry, today and tomorrow.

International tax considerations for software companies: Withholding taxes 

Software companies that are doing business internationally or considering doing so need to be aware of the withholding tax rules in the countries in which they plan to do business. These taxes can be 30 percent or more of gross software licensing income in many countries — an unpleasant surprise for an unprepared software vendor. John R. Barber, International Tax Services partner, provides tips to software companies for minimizing their tax liabilities and maximizing their income.

Modifications to accounting for multiple-element revenue arrangements 

It's no secret that revenue recognition for multiple-element arrangements can be extraordinarily complicated for technology companies. In an attempt to address some of the challenges surrounding separating elements, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2009-13, Multiple-Deliverable Revenue Arrangements – a consensus of the FASB Emerging Issues Task Force, and ASU 2009-14, Certain Revenue Arrangements That Include Software Elements – a consensus of the FASB Emerging Issues Task Force. In order to clarify what this updated revenue recognition guidance means for your company, we at Grant Thornton are pleased to share our latest New Developments Summary, Modifications to accounting for multiple-element revenue arrangements.

Successfully navigating the complex maze: Insights on Revenue Recognition 

Revenue is one of the most important line items in technology companies’ financial statements, yet determining the appropriate model for revenue recognition and making sense of requirements for vendor-specific objective evidence (VSOE) of fair value can be extremely complicated. Grant Thornton’s book, Insights on Revenue Recognition, offers clear and detailed guidance on revenue recognition, including industry-specific guidelines for software vendors.