Our survey shows new trends and disparities in SaaS capitalization models.
Product development and sales commissions are the top expenditures for many SaaS businesses. To satisfy investors, SaaS finance teams need to properly account for these hefty costs while growing their revenues and maintaining predictability. However, determining the proper accounting approach is easier said than done.
We analyzed the recent SEC filings of 80 SaaS companies to see just how they're treating these costs.
The results highlight new trends and pitfalls in many current capitalization models—and look at why the new FASB/IASB revenue standard (effective for public companies in 2017 and private companies in 2018) isn’t expected to change the way SaaS companies capitalize certain costs in the future.
In light of these practical insights, are your cost capitalization methods in line with your peers?