ASC 606 Implementation
Let's talk revenue recognition.
Everything is about to change – everything about revenue recognition, that is. Referred to as “the most impactful accounting change in decades,” ASC 606 affects every public and private company, regardless of size or industry. And now that the public sector deadline has come and gone, all eyes are on private companies to follow suit by January 2019.
If you’re thinking you still have plenty of time, we’re about to be the bearer of bad news… January may seem far away, but adopting this entirely new revenue recognition process will take significant time from a cross-functional team. Everything from client contracting, to employee compensation, to accounting processes may need to change – but the good news is: we can help.
Compared to public entities, private companies are having a harder time implementing 606 due to fewer internal resources and system constraints. Our team specializes in this type of situation – we've developed a 5-step implementation process that has minimized stress & risk for many companies.
5 Steps to ASC 606 Implementation
Steps 1 & 2: Build & Assess
To start, we’ll build a project team that includes the right stakeholders across functions and business segments. Then, during the assessment phase, we'll evaluate current accounting policies, review contracts, scope revenue streams/locations, align enterprises, and identify accounting disclosure & data gaps.
Step 3: Transition
Following steps 1 & 2, we'll have a clearer picture of where the business is today and where it should be tomorrow...and the next step is choosing the best transition method for getting there. This choice is based entirely on data availability, comparability, and costs.
Step 4: Design
This step is about designing the future state and the timeline to reach it. We'll draft new accounting policies & procedures; define systems, processes, controls, and training requirements; develop templates, use cases, and opening balance sheet; and create an implementation plan.
Step 5: Implement
Now it’s time to execute the plan. This entails configuring and testing new systems & processes; rolling out reporting packages & guidelines; drafting comparative financial statements; implementing permanent plan procedures; and then deploying & providing support.