Revenue Recognition Blog

What PSO’s need to do to prepare for new Revenue Recognition Standards

[fa icon="calendar'] Nov 13, 2017 12:35:19 PM / by Tonia Steciuk posted in Revenue Recognition, ASC 606, IFRS 15

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So the holiday season is just around the corner. Right around the second corner in the New Year, new revenue recognition regulations will be in front of us. Honestly. Really. 2018 is lurking in the hallway and there’s no avoiding it.

When talking to professional services organizations on a daily basis, Changepoint’s Director of Product Management, Greg Davidson, has come across many who still do not have enough information or do not clearly understand if there is an impact (or what the impact is). Or even avoiding it, hoping down the road someone will make it simpler! Although the pace has picked up considerably as we approach the effective date of 1 January 2018, there are still many organizations that need to ramp up their preparation.

Greg will be co-presenting a live webinar on November 16 (9am PSF / 12pm EST / 6pm CET) along with Jeff Halden from Softrax to address the impact of the new revenue recognition standard on PSO’s.

During the webinar, he’ll talk you through the ‘Five Step Framework’ of Revenue Recognition and highlight key areas of concern for PSO’s such as the treatment of revenue and how Professional Services Automation can help you better manage revenue recognition.

Happy Holidays!

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Three ways to identify IFRS 15 and ASC 606 variable considerations

[fa icon="calendar'] Jul 31, 2017 8:43:52 AM / by Ali Almohashi, MSA, CMA posted in Revenue Recognition, ASC 606, IFRS 15, Variable Consideration

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IFRS 15 and ASC 606 provide a five-step model for recognizing revenue. Step 3 requires that at the beginning of the contract, and at each reporting period, the entity has to determine the amount of consideration to be entitled to.

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Internal Controls with The New Revenue Recognition Standard

[fa icon="calendar'] Jun 2, 2017 3:03:21 PM / by Ali Almohashi, MSA, CMA posted in Internal Controls

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company Golden Bear Golf Inc. is named after legendary golfer Jack Nicklaus. Its fully owned subsidiary is Paragon, which builds golf courses. Paragon executives Boyd and Curbello artificially increased revenue. They conducted fraudulent schemes to manipulate revenue by accelerating project progress, inflating expected revenue, creating fictitious contracts, and not recording unexpected project losses. Boyd and Curbello even started accepting a loss contract where the cost of the contract was higher than the price charged. Then, they did not record losses associated with these contracts. This scheme overstated Paragon revenue by more than $25 million.

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Companies Still Assessing Revenue Recognition & Auditors Must Take Action

[fa icon="calendar'] Dec 22, 2016 11:19:19 AM / by Julia Cain posted in Revenue Recognition

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Public companies are still behind in their efforts to implement ASC 606 & IFRS 15. Time is running out for public companies, as they only have a year before the new revenue recognition guidelines come into play. The new accounting standard is effective for public companies with annual reporting periods beginning after December 15, 2017 (fiscal year 2018) and non-public companies beginning after December 15, 2018 (fiscal year 2019).  

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Your Five-Step Program to Revenue Recognition Compliance

[fa icon="calendar'] Oct 7, 2016 11:24:44 AM / by Brian Terrell posted in Revenue Recognition

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I’ve been writing a lot lately about the new revenue recognition standards (created by ASC 606 and IFRS 15) companies will soon need to adopt to ensure compliance. Granted, it’s a complex and somewhat dry topic, but it’s one poised to have a tremendous impact on public and private companies alike. Since most of us aren’t accountants (full disclosure – I am, but not practicing), I thought it could be helpful to boil down the changes to the five core steps to compliance.

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Comments on SEC Staff Announcement on SAB Topic 11.M (SAB 74)

[fa icon="calendar'] Sep 27, 2016 5:12:53 PM / by AC Sondhi & Associates

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On September 22, 2016, the SEC Staff issued comments on the disclosure requirements of SAB Topic 11.M (SAB 74) related to the expected impact on financial statements of the future adoption of the following recently issued accounting standards:

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Companies are slacking when it comes to Revenue Recognition Implementation

[fa icon="calendar'] Jun 2, 2016 10:05:36 AM / by Julia Cain posted in Revenue Recognition

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According to Bloomberg’s recent article, “Many Companies Completely Unready for Revenue Standard” public companies are slacking when it comes to implementing the new revenue recognition standard. Companies have until December 2018, however, companies should start their implementation early. Could take companies up to nine months to understand the weight and significance of the new regulations on their organization.  Companies will be required to assess all of their contracts individually to determine the impact. Then companies will need additional time in order to determine a plan of action and processes in place.

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KPMG Releases Guide on Revenue Recognition Dislcosures

[fa icon="calendar'] May 16, 2016 12:01:42 PM / by Julia Cain posted in KPMG, Revenue Recognition Disclosures

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FASB significantly expanded disclosure requirements related to revenue recognition which are an important part of the new revenue recognition standard.  The revenue disclosure significantly change to the way in which you will be required to process financial statements even when revenue recognition is not significantly changed.  With ASC 606, you will be required to disclose revenue information regarding the nature, amount, timing and uncertainty of revenue and cash flows. 

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Understanding Variable Consideration and The Time Value of Money

[fa icon="calendar'] May 9, 2016 9:24:56 AM / by Jagruti Solanki posted in Revenue Recognition, Time value of Money

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With the new revenue recognition standards upon us and adoption for public entities right around the corner, we’re finding that two aspects are tripping our clients and prospects up more than any other - variable consideration and the time value of money. 

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Can you mitigate credit risk under new Rev Rec standard?

[fa icon="calendar'] Feb 15, 2016 1:36:14 PM / by Sam Kerlin, Argon Advisors posted in Revenue Recognition

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What if you don't have a contract for accounting purposes?  Any relief? ….The FASB takes a shot at these and more at its recent meeting. 

The FASB met on February 10, 2016 to discuss feedback on proposed Accounting Standards Update, Revenue from Contracts with Customers Topic 606:  Narrow-Scope Improvements and Practical Expedients.   The feedback came from various accounting organizations as well as preparers and users of financial statements.  The Board largely upheld its proposed changes to the new revenue standard, with a few twists described below. 

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