The Changes Will be Significant
The new converged accounting standard between the Financial Accounting Standards Board (ASC §606) and the International Accounting Standards Board (IFRS 15) will soon replace today’s rules-based approach for revenue recognition to one that’s principles-based for all companies, including ones that are privately-held. In an effort to make financial statements more comparable, the new rules must be applied consistently accounting across industries, requiring companies to make and document more judgments and provide more comprehensive disclosures. The new rules will be effective for publicly-held companies for reporting periods beginning after December 15, 2017 (January 1, 2018 for calendar year-end companies), while privately-held companies have one additional year to comply. We Can Help.
How We Can Support You
At Accretive, we have a thirty-year history of leading best practice initiatives for companies ranging from dozens to tens of thousands of employees, including the adoption of the some of the first revenue accounting standards and the adoption of ASC §606.
Here's how we can help you:
a) Project Management
Successful adoption of the new revenue recognition standard requires a project-based approach to the implementation of the new standard. Because revenue by its nature impacts many aspects of an organization, a project manager should be selected who can take the lead on understanding and implementing the new standard and who can coordinate the efforts from across the organization, including accounting, financial reporting, tax, internal audit, sales, IT, legal, and human resources.
b) Determine Accounting and Reporting Impacts
Based upon your business model, our tenured technical accounting experts can efficiently assess the impact that the new standard will have on your business. We can identify gaps in your revenue recognition policy, including the required methodologies and judgments across all product and service lines, and in the company’s accounting, reporting and disclosures so you can plan accordingly.
c) Process and System Design
For many companies, the new converged standard will require significant changes in the information being compiled and hence business processes. These changes will likely impact functions across the organization: order management, sales, product management, legal, human resources, financial reporting, internal controls and accounting operations. Our process and systems design experts can assess the capabilities of your current ERP and the need for either an over-the-top revenue application (e.g., Leeyo’s RevPro, RevStream) or a custom-developed solution.
a) Process Changes
Our cross-functional experts across accounting, process and business systems work together to effect process changes that ensure a smooth transition to the new standard and a minimal disruption to the business. Such changes will often include new policy adoptions, pricing guidelines, contract language and form and template implementations. We can also backfill key roles to allow internal resources to free up and focus on new process implementations.
b) System Changes
Our system experts can implement or build best of breed technologies that will ensure your design is implemented on time and on budget. We can also supplement the design with workflow automations that ensure your team is efficiently collaborating on the right information.
c) Communication and Training
Our dedicated collaboration practice targets the personnel implications of strategic, organizational, process, or technology changes, implications that are often essential to a successful implementation. We can work with your organization’s leaders to ensure they understand and can articulate the changes, and we can deliver leading-edge solutions to broadly communicate change across the enterprise.