Handling Subscription Bundle structures and revenue recognition can be challenging for companies that offer combined packages of hardware, software, and services on a subscription basis.
This is due to the complexity of properly recognizing revenue under ASC 606 standards. Businesses must accurately allocate earnings across different elements of the bundle, considering their performance obligations, contract terms, and pricing models. Inaccurate allocation could lead to errors in financial reporting, compliance issues, and legal risks.
This challenge is especially significant for companies transitioning to digital models, as moving to subscription-based systems demands significant investments in technology, processes, and skilled personnel.
Every business faces this situation.
