As of January 2018, all companies must comply with the new revenue standards (Update No. 2014-09; ASC 606). The new guidance has major implications for most companies, and affects how revenue is recognized, measured, and disclosed. It may well have implications for business operations, software, processes and controls. In some cases, the effort needed to implement the new standard may be small, but in many more it may be quite complex.
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Our firm has the staff, know-how and depth of abilities to help companies manage through the entire process from Evaluation through Implementation and the implementation of sustainable systems.
Effective first steps to consider as you begin to evaluate the implications of the new FASB standard may include:
- Evaluating major revenue streams and business units, along with the related contracts to identify the impact of the guidance on the company’s financial reporting and revenue recognition policies.
- Understanding the transition options and how each impact the company.
- Making key decisions related to recognition policy setting and adoption and applying those decisions to the company’s revenue streams and transition methods.
- Communicating regarding the implementation with impacted stakeholders.
- Establishing a project plan to assess risk, design procedures and timelines to conduct the implementation across the organization.
- Managing the implementation and work effort, calculating the revenue recognition changes required and recording in the company’s financial statements.
- Designing systems, controls and staff education policies to ensure an effective, sustainable implementation.
Our revenue experts are uniquely positioned to help companies with this task. The steps we take to help companies through this process occur in 5 phases.
|1. Evaluate||2. Design||3. Communicate||4. Implement||5. Ongoing Compliance|
|Current Material Revenue Streams||Determine how guidance impacts existing streams and contracts||Management||Assign responsibilities||Develop sustainable controls|
|Key Contracts and Revisions||Model the contracts and revenue streams||Audit Committee||Hold accountable to timelines||Systems implementation|
|Current Revenue Recognition policices||Develop the plan for implementation||Auditors and other stakeholders||Regular reporting of progress||Ongoing monitoring|