percentage completion rules?


M

Mike Lewis

This is part GAAP accounting and part tax question. I have a
client who has developed 3 major software systems which they
lease to insurance companies. They want to switch from cash
to accrual basis. The only contracts I believe should be
recorded on a percentage completion method is the "sale" of
one of these leases. This entails 3 to 4 phases, each
defined by contract where the buyer has the right to agree
that that phase is completed to their satisfaction, at which
point the agreed upon portion of the total contract is
payable.Most leases include conversion of the clients data
files, training, etc and range from 3-6 months in duration
from signing of the contract to completion of the
installation.

Can anyone give me names of books, manuals, reference
material, etc. that would address both the GAAP accounting
and the fed tax rules specifically for software leasing
companies?

Thanks,

Mike Lewis, CPA
 
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