Principal versus agent: Assessing how to recognize revenue

Every Tuesday in June, Angela Fergason is taking over the podcast to share the latest in her areas of specialty — including recent trends in revenue, how to consider whether your company is a principal or agent when recognizing revenue, software costs, and restructurings.

To continue the series, Heather and Angela are joined by Mike Coleman, a partner in PwC’s National Office, to share insights on the challenges in the principal versus agent analysis.

In this episode, you’ll hear discussion of:

• 1:37 - An overview of the principal versus agent assessment
• 3:52 - Practical examples
• 7:09 - An overview of the two-step assessment of whether the company acts as the principal or agent from the perspective of the intermediary
• 17:22 - An overview of the two-step assessment of whether the company acts as the principal or agent from the perspective of the vendor
• 18:22 - Considerations when accounting for revenue based on the results of the principal versus agent analysis
• 22:35 - Final advice to clients and engagements teams when performing the principal versus agent assessment

For more information, read chapter 10 of our Revenue guide for principal versus agent considerations.

Angela Fergason is a partner and standard setting leader in PwC's National Office who specializes in accounting for revenue and employee compensation arrangements. She also consults on a range of financial reporting issues impacting technology companies. 

Mike Coleman is a partner in PwC's National Office with over 30 years of experience. Mike specializes in accounting for revenue and software arrangements and has served technology clients for much of his career. In addition, Mike has represented the firm on the AICPA Software Task Force.

Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.

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