It´s an accounting issue (3 + 4)

continued from here:

Agreement Language

There are several issues that must be considered around agreement language that can impact how the revenue is reported.

  • Gross versus Net Revenue reporting: Service provider costs, related party transactions and alliance agreements.
  • Pricing structure and embedded leases

Compliance and Controls

Compliance and control is important since it offers assurances to investors and more often than not, it is the law.

Points and Reminders:
• Clients and service providers need their accounting experts to sign off on any accounting treatments.
• Every contract can be different; slight nuances to contract language can alter accounting treatments.
• Recognizing and addressing these issues upfront, in the client’s sourcing strategy, improves their RFP and negotiation position.
• Everyone benefits from a clearly defined strategy.

And one last parting thought, “It’s an Accounting Issue.  No, it’s a Contract Issue.”