Revenue recognition: Effectively managing accounting change

Adapting to a new five-step model to recognize revenue from customer contracts

It's time for private companies to get started

With the deadline for the FASB standard change (ASC 606) for nonpublic companies approaching in January 2019, private companies should start determining their next steps now. The new revenue recognition standard report outlines what private companies should consider when adopting ASC 606. Read why companies need to start thinking about implementing the new standard and the methods of adoption available. The report also includes a helpful matrix of the extended ASC disclosure requirements, along with the nonpublic elections.

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Implementing a phased approach

PwC suggests applying a phased approach to transitional changes (see diagram). You’ll need to consider program management, organizational change management, potential system modifications and/or implementation and accounting oversight. PwC can advise and assist with the entire conversion process, and we have developed project-enabling tools to facilitate that process.

Phased approach

When implementing an interim, brute force approach, consider steps that will support future-state revenue automation.

Brute force may be needed to reach ASC 606 compliance

While the impact of the revenue recognition change is limited for some companies, others, such as those with complex business processes, are finding the impact to be significant. Many of those companies have decided to pursue an automated revenue management system. But in some cases, the effective date may make it impractical to effectively implement systems in the remaining time before adoption. In this situation, an interim, “brute force” approach to meet compliance by the deadline may be the only option. What are the steps and special considerations for taking this type of accelerated, manual approach?

Explore the PwC report: Taking a brute force approach to ASC 606 compliance.

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Joe Tort
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Robert Bishop
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