Computer Associates 2005 Annual Report Download - page 68
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Please find page 68 of the 2005 Computer Associates annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
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a defined period of time before committing to license the software. If a license agreement includes an acceptance provision, we do not
record deferred subscription revenue or recognize revenue until the earlier of the receipt of a written customer acceptance or, if not
notified by the customer to cancel the license agreement, the expiration of the acceptance period.
Under our Business Model, software license agreements include flexible contractual provisions that, among other things, allow
customers to receive unspecified future software products for no additional fee. These agreements combine the right to use the software
product with maintenance for the term of the agreement. Under these agreements, we recognize revenue ratably over the term of the
license agreement beginning upon completion of the four SOP 97-2 recognition criteria noted above. For license agreements signed prior
to October 2000 (the prior business model), once all four of the above noted revenue recognition criteria were met, software license fees
were recognized as revenue up-front, and the maintenance fees were deferred and subsequently recognized as revenue over the term of
the license.
Maintenance revenue is derived from two primary sources: (1) combined license and maintenance agreements recorded under the prior
business model; and (2) stand-alone maintenance agreements.
Under the prior business model, maintenance and license fees were generally combined into a single license agreement. The
maintenance portion was deferred and amortized into revenue over the initial license agreement term. Many of these license agreements
have not reached the end of their initial terms and, therefore, continue to amortize. This amortization
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