There’s a change happening in accounting. The new Revenue Recognition rules, ASC 606, is creating a major shift in how businesses handle accounting. Nearly every organization (if they haven’t already) is going to be looking at how they have been doing their accounting and how they are going to adopt the new standard. The new ASC 606 standard provides a comprehensive revenue recognition model intended to increase financial statement comparability across companies and significantly reduce the complexity in today's revenue recognition standards.
Who is impacted the most?
Companies of all sizes (large, public entities to smaller firms) can be impacted by the new ASC 606 standards, however software companies are predicted to absorb the most changes. According to CPA Practice Advisor, in software and SaaS organizations, the contract is at the core of managing the lifecycle of the relationship with their customers. The transition to the new ASC 606 revenue recognition guidelines is making the contract the new “unit” of Accounting.
When does it happen?
The ASC 606 standards impact public organizations in 2018 and private companies in 2019.
How can you learn more?
We’ve done some of the work for you and gathered assets and materials in our resource center. You’ll find eBooks, webinars, and articles that talk about the new rules and actions that you should take right now.
In addition, here’s a handful of articles and downloads that you might find helpful:
Tech Target’s Q&A with Sage Intacct's Rob Reid on pending accounting standards changes – Rob Reid discusses the new ASC 606 revenue recognition standards and what companies need to do to meet looming deadlines.
CPA Practice Advisor’s article: Mission Impossible? Complying with Data Reporting Under the New FASB ASC 606 – takes a deeper dive on how to prepare.
Citrin Cooperman's ASC 606 Revenue From Contracts with Customers – Are You Ready? webinar – talks about key concepts and the reason for the change and gives a walk through of the new five-step revenue recognition model.
Sage Intacct’s 5 Steps to Navigate the New ASC 606 and IFRS 15 Revenue Recognition Standards Infographic – gives a nice overview of the steps organizations need to consider when approached with the new standards.
Accounting Today’s Article: ASC 606 or 666? Revenue recognition standard could spell trouble for software companies – discusses the challenges for technology businesses, particularly those relying on traditional subscription licenses, and many companies aren’t ready for the impact on their financials.
Let us know if you have any questions or would like to discuss further.