Prepare the evidence for a software reseller's gross-or-net revenue review

Collect the customer agreement, supplier terms and any separate support or implementation contract. Describe each promised product or service and who actually delivers it. A reseller may arrange a software license while providing its own training or support. The accounting reviewer needs the complete arrangement rather than a single invoice showing the total charged.

The IFRS Interpretations Committee's software-reseller agenda decision explains that the principal-or-agent assessment depends on the specified goods or services and control before transfer, evaluated using the actual facts. It does not establish one answer for every software reseller. Ask the accountant to apply the business's reporting framework to its own contracts.

Identify who is responsible for supplying a working license, correcting an unsuitable order, providing ongoing service and dealing with customer complaints. Preserve the clauses and operational procedures that support those responsibilities. Where the contract and daily practice differ, describe the difference and seek the appropriate legal and accounting review.

Ask how licenses are ordered and issued, whether they can be redirected, and who bears the cost if a customer rejects them. Record who sets the selling price and any practical restrictions. These facts help the reviewer understand the arrangement, but no single commercial feature should be turned into an automatic accounting conclusion.

Prepare a diagram or table showing the customer's payment, the supplier charge, any commission and separately billed services. Reconcile it to invoices and settlement records. State whether the reseller collects the full customer amount, receives a net remittance or pays the supplier before collection. Those cash mechanics need to be understood without being mistaken for the complete revenue analysis.

For a hypothetical arrangement, a reseller might invoice software and its own training together, then remit an amount to the software supplier. The combined customer bill does not settle whether every component has the same presentation. Give the reviewer the service descriptions and allocation evidence so the conclusion can distinguish components where necessary.

Ask for an assessment identifying the relevant promises, significant facts, framework applied and conclusion. It should explain how the facts support the result and how the accounting records will implement it. A note saying reseller equals net or invoice issued equals gross leaves the business without a defensible rationale when the arrangement changes.

Retain any missing information and the person responsible for obtaining it. If the conclusion is provisional, mark it as such and state what could change it. Keep the approved workpaper with the customer and supplier contracts, rather than storing it only in an adviser email that the operating team cannot locate later.

Flag new supplier terms, bundled services, changed acceptance risk or a different fulfillment arrangement for review. A prior conclusion may remain appropriate, but it should be assessed against the new facts. Train commercial staff to identify those changes without asking them to decide the accounting outcome.

Reconcile the first transactions under the approved treatment to the ledger and management reports. Explain any difference between customer billings, recognized revenue and net cash received. That bridge lets leadership understand the channel's economics while preserving the accounting presentation selected through the documented review.