Helping clients meet their business challenges begins with an in-depth understanding of the industries in which they work. That’s why KPMG LLP established its industry-driven structure. In fact, KPMG LLP was the first of the Big Four firms to organize itself along the same industry lines as clients.

How We Work

We bring together passionate problem-solvers, innovative technologies, and full-service capabilities to create opportunity with every insight.

Learn more

Careers & Culture

What is culture? Culture is how we do things around here. It is the combination of a predominant mindset, actions (both big and small) that we all commit to every day, and the underlying processes, programs and systems supporting how work gets done.

Learn more

Handbook: Revenue for software and SaaS

Handbooks | May 2024

Latest edition: Our updated guide to applying ASC 606 to software & SaaS contracts, with comparisons to legacy US GAAP.

Using detailed Q&As and examples, our in-depth guide explains how the revenue standard (ASC 606) applies to software licensing and SaaS arrangements. This latest edition is updated for continuing developments in practice.


  • ASC 606 and ASC 340-40
  • All software and software-as-a-service companies

Key impacts

Revenue recognition continues to be top of mind for software and software-as-a-service (SaaS) entities because of the complex nature of their arrangements and evolving business models.

ASC 606 requires software and SaaS entities to make significant judgments and estimates to account for their revenue contracts. In particular, evolving business practices continue to create new and unique challenges when identifying performance obligations and allocating the transaction price to those performance obligations. Contract modifications also continue to give rise to questions.

This Handbook provides detailed technical guidance on applying ASC 606 (and Subtopic 340-40) to software licensing and SaaS arrangements. We address a wide variety of software and SaaS-specific issues and questions that have arisen during and since the adoption of ASC 606. We compare the effects of ASC 606 to those under legacy US GAAP for many longstanding software and SaaS practice issues.

KPMG Handbook, Revenue recognition, is a complement to this industry-specific Handbook. It illustrates how ASC 606 applies to common transactions, provides examples about common scenarios, explains our emerging thinking on key interpretative issues and compares the new requirements to legacy US GAAP.  

Report contents

  • Software and SaaS industry overview
  • Scope
  • Step 1: Identify the contract with the customer
  • Step 2: Identify the performance obligations in the contract
  • Step 3: Determine the transaction price
  • Step 4: Allocate the transaction price to the performance obligations in the contract
  • Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation
  • Contract modifications
  • Contract costs

Download the document:

Revenue for software and SaaS

Download PDF

Accounting Research Online

Access our accounting research website for additional resources for your financial reporting needs.

Thank you!

Thank you for contacting KPMG. We will respond to you as soon as possible.

Contact KPMG

Use this form to submit general inquiries to KPMG. We will respond to you as soon as possible.

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement.

An error occurred. Please contact customer support.

Job seekers

Visit our careers section or search our jobs database.

Submit RFP

Use the RFP submission form to detail the services KPMG can help assist you with.

Office locations

International hotline

You can confidentially report concerns to the KPMG International hotline

Press contacts

Do you need to speak with our Press Office? Here's how to get in touch.