5 Ways Credit Teams Can Improve Compliance with ASC 606 and IFRS 15. This deck covers the goals of the Account Standard Change and provides insights into how to best implement the ASC 606 and IFRS 15. The goals of the ASC include transparency, accountability, and efficiency. The ASC will achieve transparency by improving the ability to easily compare financials around the globe. Accountability will become more prevalent by making financial information more freely available and accessible. Accounting standards will be more efficient by helping investors identify risk and opportunity across the world. The drivers of the Accounting Standards Change are global consistency, updates to United States standards, broad impacts to global finance, and evolving business models. These accounting standards will be the first sweeping change to US reporting in 40+ years. Account standards need to keep up with business as over 33% of business is now done across boarders, and modern business models are requiring different reporting styles. The ASC 606 & IFRS 15 Five Steps to New Recognition are: identify, map, determine, allocate and claim. The first step requires businesses to identify the contract with a customer. Next, companies must map the performance obligations to the contract. Companies must also determine the transaction price to each deliverable. Then they need to allocate the price to the contracts performance obligations. Finally business must claim revenue when performance obligations are satisfied. Here are the most frequently asked questions for the ASC 606 and IFRS 15: Q) Are there Non-Compliance Penalties? A) Non-compliance could result in major impacts to investor confidence, share price and eventual stock delisting. Q) Who is impacted and when? A) All public companies were to certify compliance with their external auditor with the new GAAP standard within 2018 however some companies petitioned for an extension to 2019. All private companies to be compliant by the end of 2019. Q) Why would a private company comply? A) ASC 606 and IFRS 15 are standards which many larger private companies follow to ensure they have access to financial resources that require financials such as bank loans, floating new debt or filing taking company public (IPO). Did you also know that many large organizations will not extend credit terms to non-compliant suppliers? Dun & Bradstreet's five ways to simplify revenue recognition are: 1) Identify your contracts 2) Link your customers 3) Evaluate your customers' creditworthiness 4) Align your collections efficacy 5) Monitor changes in your customer portfolio For more information about how Dun & Bradstreet can help improve your implementation of ASC 606 and IFRS 15 visit our website here: https://www.dnb.com/solutions/finance-and-risk-management.html

1. 5Ways CreditTeams Can Improve Compliance
with ASC 606 and IFRS 15
These materials are provided by D&B as a service to its customers, may not be copied or distributed, and may be
used for informational purposes only. Copyright (c) 2018 D&B. All rights reserved.
TAKING THE HEADACHE
OUT OF REVENUE
RECOGNITION COMPLIANCE
JULY 24, 2018

2. Robert Kirk
Leader, Finance Solutions
Dun & Bradstreet
ABOUT THE SPE AK E R
With over 15 years of experience in Trade Credit and Risk
Management, Robert Kirk helps companies understand their business
to business relationships. Specializing in helping improve profitability,
increase free-cash flow and mitigating risks of these commercial
relationships; he partners with firms to build best-in-class quote-to-
cash and supplier risk management policies and implement best
practices to maximize the value of their business relationships.

3. B A C K G R O U N D O N A S C 6 0 6
& I F R S 1 5
T H E 5 - S T E P R E V E N U E
R E C O G N I T I O N P R O C E S S
T H E I M PA C T TO C R E D I T
P R O C E S S E S
5 WAY S TO S I M P L I F Y
R E V E N U E R E C O G N I T I O N
Q & A
AGENDA

4. B ACK G ROUND ON ASC 6 0 6 & IFRS 1 5

5. Under the old standard, with regard
to contracts for delivery of service over
time, companies could only recognize
as revenue amounts actually billed to a
customer. Under the new standard,
so long as a company believes that a
customer is creditworthy, the company
is allowed to recognize contract revenue
ratably over the entire contract term.
Data quality, not which IT system to select, is the
main hurdle companies will experience in readying
for the shift to the new recognition rules.
WHAT THE E XPE RTS ARE SAYING
This is arguably one of the biggest
compliance changes for business
since Sarbanes-Oxley. Bloomberg
reports that “public companies…
are gearing up for the most historic
accounting changes to hit
U.S. Capital markets in decades.
– CFO.COM
– BLOOMBERG BNA
– CFO.COM

6. 6
Goals of the Accounting Standard Change
TRANSPARENCY
Ability to easily compare
financials across the globe
ACCOUNTABILITY
Financial information more
freely available and accessible
EFFICIENCY
Help investors identify risk and
opportunity across the world
TAKING THE HEADACHE OUT OF REVENUE RECOGNITION COMPLIANCE

7. 7
Drivers of the Accounting Standards Change
There are
great benefits
from having
accounting/reporting
standards worldwide.
GLOBAL
CONSISTENCY
UPDATES TO UNITED
STATES STANDARDS
BROAD
IMPACT
EVOLVING
BUSINESS MODELS
US accounting and
reporting is
undergoing the
first sweeping
change in 40+ years.
Greater than 33% of all
business is done across
borders including goods,
Services, but also global
mergers and acquisitions.
Business has changed
over the past 30 years,
and modern subscription
businesses are
very prevalent.
TAKING THE HEADACHE OUT OF REVENUE RECOGNITION COMPLIANCE

8. THE 5 - STE P RE VE NUE RE COG NITION PROCE SS

9. 9TAKING THE HEADACHE OUT OF REVENUE RECOGNITION COMPLIANCE
IDENTIFY the contract with a customer
MAP the performance obligations to the contract
DETERMINE the transaction price to each deliverable
ALLOCATE the price to the contract’s performance obligations
CLAIM revenue when performance obligations are satisfied
IDENTIFY
MAP
DETERMINE
ALLOCATE
CLAIM
ASC 606 & IFRS 15 – Five Steps to New Recognition

10. THE IMPACT TO CRE DIT PROCE SSE S

11. 11
Frequently Asked Questions:ASC 606 and IFRS 15
TAKING THE HEADACHE OUT OF REVENUE RECOGNITION COMPLIANCE
Non-compliance could result in major impacts to investor confidence, share
price and eventual stock delisting
A R E T H E R E
N O N - C O M P L I A N C E
P E N A L T I E S ?
All public companies were to certify compliance with their external auditor with
the new GAAP standard within 2018 however some companies petitioned for an
extension to 2019.All private companies to be compliant by end of 2019.
W H O I S
I M P A C T E D
A N D W H E N ?
ASC 606 and IFRS 15 are standards which many larger private companies follow
to ensure they have access to financial resources that require financials such as
bank loans, floating new debt or filing taking company public (IPO).
W H Y W O U L D
A P R I V A T E
C O M P A N Y
C O M P L Y ?
DID YOU KNOW? MANY LARGE ORGANIZATIONS
WILL NOT EXTEND CREDIT TERMS TO NON-COMPLIANT SUPPLIERS.

12. 5 WAYS TO SIMPLIFY RE VE NUE RE COG NITION

13. 13
FiveWays to Simplify Revenue Recognition
EVALUATE YOUR
CUSTOMERS’
CREDITWORTHINESS
LINK
YOUR
CUSTOMERS
IDENTIFY
YOUR
CONTRACTS
ALIGN YOUR
COLLECTIONS
EFFICACY
MONITOR CHANGES
IN YOUR CUSTOMER
PORTFOLIO
21 3 4 5
TAKING THE HEADACHE OUT OF REVENUE RECOGNITION COMPLIANCE

14. 1. IdentifyYour Customers & Contracts
• Establish a customer master file to understand
all contracts and pricing for each customer.
• A credit process is required to “identify the
contract and customer” and determine the
collectability risk of each new sale to a new or
existing customer.
CUSTOMER
CONTRACT
IDENTIFICATION
BEST PRACTICES

15. 2. LinkYour Customers
• Evaluate how you establish and maintain the
relationships between your accounts for
consistent treatment.
• Finance teams must connect customers to
link contracts to drive consistent revenue
treatment to the same customer.
CUSTOMER
LINKING
BEST PRACTICES

16. 3. EvaluateYour Customers’ Collectability
• Review options for up-front credit decisioning
and automated credit decisioning workflows,
leveraging both internal and third-party data.
• Discuss options for professional services
engagements to review your credit policy.
• Create a forward-looking model that helps
predict credit losses.
CREDIT
EVALUATION
BEST PRACTICES

17. 4.AlignYour Collections Efficacy
• Accurate identification of collectability
determines the revenue that must be deferred.
• Create a repeatable, reliable collections strategy
and procedure to maximize revenue recognition
that will withstand an audit.
COLLECTIONS
ALIGNMENT
BEST PRACTICES

18. 5. Monitor Changes inYour Customer Portfolio
• Ensure you have a best-in-class framework to
monitor your embedded base of accounts
over time.
• The accounting standards require that you
maintain awareness of changes to customer
identity and collectability over time.
CUSTOMER
MONITORING
BEST PRACTICES

19. 19APPLYING ARTIFICIAL INTELLIGENCE TO FINANCE
Accurate Data:The Foundation for All Business Insights
ACTIONABLE
INSIGHT
COMPLETE
CUSTOMER VIEW
IDENTITY RESOLUTION
CUSTOMER DATA
DESTINATION:

20. 20
How Dun & Bradstreet Can Help
Leverage Dun & Bradstreet’s predictive scoring
models to evaluate the likelihood of potential credit
risks before it’s too late, and address your high-risk
portfolio accordingly to optimize cash flow.
Establish better payment terms and make better
credit decisions using the Dun & Bradstreet Data
Cloud integrated directly into your systems.
Dun & Bradstreet’s unique Live Business Identity
information featuring the D-U-N-S® Number and
firmographic data are the industry standard for
business identification and identity resolution.
TAKING THE HEADACHE OUT OF REVENUE RECOGNITION COMPLIANCE
IDENTIFY
DETERMINE
IDENTIFY
DETERMINE

21. AQ

22. THANK YOU FOR JOINING US!
Robert Kirk,
Dun & Bradstreet
kirkr@dnb.com