1. ASC606 Revenue Recognition Changes
Are you ready for January 1, 2015?
Convergence:
On May 28, 2014, the FASB issued ASC 606 - Revenue from Contracts with Customers. Revenue is often the most critical measure for entities and their stakeholders, and for many growth companies, more important than the bottom line, which could also be significantly impacted by changes in revenue. Implementation, while effective in 2017 (2018 for private companies), will include restatement of 2015-16 as part of the transition, and will impact long term agreements. Change orders to contracts written under current rules but active before and after these cutoff dates may require recalculation. There will be significantly greater disclosures required under ASC 606.
ASC 606: strategies on its effect need to be implemented by January 1, 2015
Have you:
 Considered is the impact on existing contracts and identified any features or terms that may require additional analysis under the “five-step” approach?
 Worked through multiple interpretations about gross vs. net revenue classification?
 Evaluated your ability to collect and maintain the data necessary to comply with the standard given current processes and systems?
 Determined where the standard requires management to make additional judgments, including estimates.
 Reviewed the nature and amount of disclosures required under the new standard to evaluate whether you collect the required information?
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