Multiple Element Arrangements: As described above, we enter into the following revenue arrangements that may consist of multiple deliverables:
| |
• | Bundled lease arrangements, which typically include both lease deliverables and non-lease deliverables as described above. |
| |
• | Contracts for multiple types of outsourcing services, as well as professional and value-added services. For instance, we may contract for an implementation or development project and also provide services to operate the system over a period of time; or we may contract to scan, manage and store customer documents. |
In substantially all of our multiple element arrangements, we are able to separate the deliverables since we normally will meet both of the following criteria:
| |
• | The delivered item(s) has value to the customer on a stand-alone basis; and |
| |
• | If the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control. |
Consideration in a multiple-element arrangement is allocated at the inception of the arrangement to all deliverables on the basis of the relative selling price. When applying the relative selling price method, the selling price for each deliverable is primarily determined based on VSOE or third-party evidence (TPE) of the selling price. The above noted revenue policies are then applied to each separated deliverable, as applicable.
