Please review this case in the context of the five-step Revenue Recognition Process found in FASB ASC 606 (& IFRS 15)

- Revenue from Contracts with Customers.

1)Determine Transaction price based on performance obligation #1 software & data licenses & #2 managed & professional services

The revenue recognition standard states that the transaction price is the amount of consideration (for example, payment) to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes).The following table is the transaction price

2) Allocate the transactions price to the performance obligations in the contract

The revenue recognition standard states that if a contract has more than one performance obligation, an entity should allocate the transaction price to each separate performance obligation in an amount that depicts the amount of consideration to which the entity expects to be entitled in exchange for satisfying each separate performance obligation. To allocate an appropriate amount of consideration to each performance obligation, an entity should determine the stand-alone selling price at contract inception of the distinct goods or services underlying each performance obligation. Sometimes, the transaction price includes a discount or variable consideration that relates entirely to one of the performance obligations in a contract. The requirements specify when an entity should allocate the discount or variable consideration to one (or some) performance obligation(s) rather than to all performance obligations in the contract. An entity should allocate to the performance obligations in the contract any subsequent changes in the transaction price on the same basis as at contract inception. Amounts allocated to a satisifed performance obligation should be recognized as revenue, or as a reduction of revenue, in the period in which the transaction price changes.The allocation of transaction price is as follows

Table 1: Software, Data, Managed Services and Professional Services Pricing Description Software Licenses Data Licenses Managed Services Professional Services Total Firm Fixed Price: Year 1 Year 2 Year 3 Invoicing Terms $224,000 $116,000 $116,000 Annual $256,420 $244.939 $246,109 Annual $36,100 $89.200 $90.400 Initial setup and monthly fee $279.090 $92,629 $62.816 Monthly invoicing based on percent complete $795,610 $542.768 $515.325 Table 1: Software, Data, Managed Services and Professional Services Pricing Description Software Licenses Data Licenses Managed Services Professional Services Total Firm Fixed Price: Year 1 Year 2 Year 3 Invoicing Terms $224,000 $116,000 $116,000 Annual $256,420 $244.939 $246,109 Annual $36,100 $89.200 $90.400 Initial setup and monthly fee $279.090 $92,629 $62.816 Monthly invoicing based on percent complete $795,610 $542.768 $515.325