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Unformatted text preview: rights expire. Dell records estimated reductions
to revenue or an expense for indirect channel programs at the later of the offer or the time revenue is recognized.
Dell defers the cost of shipped products awaiting revenue recognition until revenue is recognized.
Services include transactional, outsourcing and project-based offerings. Revenue is recognized for services contracts as earned, which is
generally on a straight line basis over the term of the contract or on a proportional performance basis as the services are rendered and
Dell's obligations are fulfilled. Revenue from time and materials or cost-plus contracts is recognized as the services are performed.
Revenue from fixed price contracts is recognized on a straight line basis, unless revenues is earned and obligations are fulfilled in a
different pattern. These service contracts may include provisions for cancellation, termination, refunds, or service level adjustments.
These contract provisions would not have a significant impact on recognized revenue as Dell generally recognizes revenue for these
contracts as the services are performed.
For sales of extended warranties with a separate contract price, Dell defers revenue equal to the separately stated price. Revenue
associated with undelivered elements is deferred and recorded when delivery occurs or services are provided. Revenue from extended
warranty and service contracts, for which Dell is obligated to perform, is recorded as deferred revenue and subsequently recognized over
the term of the contract on a straight-line basis.
Revenue from sales of third-party extended warranty and service contracts or software PCS, for which Dell is not obligated to perform,
and for which Dell does not meet the criteria for gross revenue recognition under the guidance of the FASB , is recognized on a net
basis. All other revenue is recognized on a gross basis.
The Company recognizes revenue in accordance with industry specific software accounting guidance for all software and PCS that are
not essential to the functionality of...
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This document was uploaded on 02/22/2014 for the course ACCT 6330 at University of Texas at Dallas, Richardson.
- Spring '11