John Klee from TPI starts a series of posts on Accounting Considerations in Sourcing Environments. This is going to be interesting:
What accounting issues can impact the Sourcing strategy and/or RFP structure?
- Asset ownership: asset valuations, embedded leases in service contracts, lease capitalization
- Start-up, transition and one time charges: expensed vs. capitalization
- Potential alliance agreements: Related party transactions, gross vs. net revenue recognition
- Regulatory compliance: Sarbanes-Oxley Act, SAS70, etc
- Pricing structure: service provider revenue recognition
- After collecting cash, recognizing the revenue streams related to those collections is often a Service providers management’s greatest concern