E. Analysis of the revenue recognition policies for the three package services :
- Silver package :
The revenue recognition policy is that the customer has to pay for access to schedules , tax forms and publications. The clients can file the electronically also and the access is permitted for one year only. The Your1040Return.com recognizes the revenue when the client files tax returns to the state agency or IRS
- Gold Package :
The revenue recognition policy is that the customer can access the tax preparation software for completing and submitting the return. Your1040Return.com recognizes part of the revenue id when the service is activated and the remaining revenue is not identified unless the client demands for it. The access is permitted for one year.
- Platinum package :
The policy states that clients can access the tax software package year round for updating the information regarding tax and they can obtain personal attention and real-time tax provision from income tax specialists. Platinum revenue service identifies revenue completely at the point the client requests the service. The access is available for multiple years.
Thus , it can be concluded that Your1040Return.com for platinum package the revenue policy seems to be most aggressive, so it is recommended that the policy for Platinum package should be modified so as to ensure that it is not recording the revenue prematurely. Also the company needs to evaluate the basis for creating an estimate of cancellation expense and the related liability.