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NETSUITE LAUNCHES REV REC PRODUCT

There’s nothing more fun that listening to a presentation about the effect of FASB requirements on revenue recognition, is there? Actually, it’s fairly interesting, listening to speakers at a NetSuite event, designed to push its new NetSuite Advanced Revenue Recognition product. My first reaction about the discussions of about the impact of FASB rules on multi-element sales, EITF 08-
01 and EITF 09-03, is that auditors and attorneys ought to benefit enormously from the complexity and the transition. Companies must adopt the rules for the first fiscal year beginning on or after June 15, 2010. If I catch the gist of the speaker comments, anybody who hasn’t started on this project seriously has got its hands full. This is a product with broad goals as it is designed to integrate with other systems, such as ERP applications from SAP, Oracle and Dynamics GP, among others. The NetSuite product is available as an add-on. One explanation given by Jim McGeever, NetSuite CFO, soon to become its COO, is that it takes the complexity of revenue recognition faced by software companies, who deliver a combination of products that are put into production in stages in combinations with services delivered over time, and makes everyone else face the same standards. He warned "this could be one of the more complex mathematical calculations you'll ever face." Apple was one of the first companies to implement the FASB rules and as explained by NetSuite, that accelerated recognition of revenue from products such as iPhone, which gave it a big pop in revenue.
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