preclude immediate recognition of any revenue for the sales arrangement?
No. Assuming all other recognition criteria are met, the following circumstances exist under which revenue may be recognized for a sales arrangement, notwithstanding the seller’s remaining obligation for additional performance or delivery. (a) Revenue from the sales arrangement may be recognized in its entirety if the seller’s remaining obligation is inconsequential or perfunctory. In this case, costs expected to be incurred upon fulfillment of the remaining obligation must be reliably3 estimable and accrued when the revenue is recognized.4 Question 3 below discusses how the staff evaluates whether the remaining obligation is inconsequential or perfunctory. (b) A portion of the contract revenue may be recognized when the seller has substantially completed5 or fulfilled the terms of a separate element of a multiple-element arrangement. Question 4 below discusses the accounting for multiple-element arrangements.
