Glossary

Post Contract Customer Support (PCS)

Term Definition The right to receive services (other than those separately accounted for as described in paragraphs 65 and 66 of SOP 97-2) or unspecified product upgrades/enhancements, or both, offered to users or resellers, after the software license period begins, or after another time as provided for by the PCS arrangement. Unspecified upgrades/enhancements are PCS […]

Term Definition

The right to receive services (other than those separately accounted for as described in paragraphs 65 and 66 of SOP 97-2) or unspecified product upgrades/enhancements, or both, offered to users or resellers, after the software license period begins, or after another time as provided for by the PCS arrangement. Unspecified upgrades/enhancements are PCS only if they are offered on a when-and-if-available basis. PCS does not include the following:

Installation or other services directly related to the initial license of the software
Upgrade rights as defined in SOP 97-2
Rights to additional software products

PCS may be included in the license fee or offered separately. PCS is generally referred to in the software industry as maintenance, a term that is defined, as follows, in paragraph 52 of Statement 86:

Activities undertaken after the product is available for general release to customers to correct errors or keep the product updated with current information. Those activities include routine changes and additions.

However, the term maintenance is not used in SOP 97-2 for the following reasons:

It has taken on a broader meaning in the industry than the one described in statement 86.
It may be confused with hardware maintenance as it is used elsewhere in accounting literature.
Its meaning varies from company to company. The right to receive services and unspecified upgrades/enhancements provided under PCS is generally described by the PCS arrangement. Typical arrangements include services, such as telephone support and correction of errors (bug fixing or debugging), and unspecified product upgrades/enhancements developed by the vendor during the period in which the PCS is provided. PCS arrangements include patterns of providing services or unspecified upgrades/enhancements to users or resellers, although the arrangements may not be evidenced by a written contract signed by the vendor and the customer.

Area of Application
Revenue Recognition