FRS 102 Client Story: US-Owned Tech Business – Revenue Recognition Complexity

The problem

A UK-based software business, part of a US private equity-backed group, needed to reassess how it recognised revenue under FRS 102. Its customer contracts were at times complex, which introduced complexity around timing of revenue recognition and whether the business acted as agent or principal for each product and service – both critical areas under the updated standard.

The solution

We engaged closely with the client as they began their assessment, encouraging early discussion of their preliminary conclusions including time spent with the US finance team as well as our UK client. By reviewing contract structures together and exploring key judgement areas – such as timing and principal vs agent classification – we helped them interpret the standard in the context of their specific business model and to clarify where the treatment differed in the UK to previous agreed treatment.

The outcome

The client developed a robust and well-supported approach to revenue recognition, grounded in a clear understanding of FRS 102 requirements, reducing uncertainty around how numbers would be reported. Our collaborative approach enabled them to address complex judgement areas early and build a solid standard of supporting evidence, reducing risk and ensuring a defensible position for audit and stakeholder scrutiny.