USA Referral Credit


Jun 7, 2019
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United States
Hi - I need help on determining whether referral credit should be a reduction in revenue - therefore reporting at Net revenue or referral credit should be treated as a marketing expense. Example is - company A sells Saas product either monthly or annual. referral credit is given to customers who refer other customers to use company A's products. say customer x refers customer y - when customer y signs the agreement, customer x gets a referral credit of $25 on its next bill. what is 606 guidance on this. is it marketing expense or should be reported as a reduction from revenue. thank you


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