While Ms. Larson is confident with regard to the U.S. GAAP reporting of the CRM...
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While Ms. Larson is confident with regard to the U.S. GAAP reporting of the CRM system developed in 2018 and used by MRM, she is less certain as to the accounting for the software product developed for customers in 2019 due to the unique nature of the transaction as it relates to the companys business. You have been asked to research the relevant guidance to determine the proper course of action for the 2019 financial statements. Specifically, Ms. Larson is interested in how the fees paid to ZD for the activities from March 1August 31 should be accounted for and how these costs, along with the fees generated from the three customers, should be presented on the 2019 financial statements. As part of this task, you should perform the following activities
1.) Consult the Financial Accounting Standards Board Accounting Standards codification to find appropriate guidance on the issues presented in the case.
2.) Prepare a detailed, 1.52-page memo to Ms. Larson that includes the relevant issues for this situation, the appropriate financial reporting guidance, and your conclusion regarding the treatment of the fees generated and costs incurred for the software sold in 2019.
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