While it might not be making the same mainstream headlines as other recent developments in the financial world, in the highly-technical, business-critical world of accounting there has been one piece of legislation that everyone has been talking about – and that's ASC 606.
Inside the accounting world, the regulatory shift is being touted as the most significant change in decades. Though the regulation, which is meant to reconcile disparate methods of revenue recognition into one global standard, has been in the offing since the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) announced the change in 2014 the time is now quickly approaching when businesses will have to comply.
For most public companies, ASC 606 goes into effect this month; and for the majority of private companies, it goes into effect January 1, 2019. So if this is something you've been backburnering, there is no time to waste in learning how it applies to you, and what steps you need to take to reach full compliance.
The following list of resources should get you off on the right foot for pursuing ASC 606 compliance, and making sure that you aren't caught unaware on the go-live date of this critical-to-understand regulation.
You and your accounting department will undoubtedly have questions about various aspects of the new regulation and how it is expected to impact operations. This page from PwC should help you answer many of them; it features videos and FAQ pages that go in depth about topics like SEC reporting requirements and the impact of the standard on revenue recognition from contracts with customers.
Taking a look at this comprehensive and detailed list of resources can give you a good feel for what you know, how far along you are in the process and what things you still might have to address as you pursue compliance.
Salesforce is the biggest name in CRM solutions, and so their take on the regulation – and their guidance on how to approach it – is a priceless asset for anyone pursuing compliance. And just as Salesforce makes user-friendliness a priority with its products, their run-through of ASC 606 is one of the clearest general resources available.
And there's plenty to explore – from the introductory video that lays out the importance of the right solution in achieving end-to-end visibility and compliance, to the litany of webinars and ebooks aimed at showing businesses how to bring themselves under a single automated tech umbrella.
Easily navigable and easy to understand; if you've been nervous that you might not have a handle on exactly what is going on with the changes, the look and feel of this page alone will make you feel like ASC 606 is something that you can wrap your head around, and that the changes it demands are ones you can realistically implement.
In providing a general rule for revenue recognition, ASC 606 is going to impact a broad range of industries, and each industry is going to have nuanced questions based on its accounting conventions.
With that in mind, the American Institute of Certified Public Accountants (AICPA) has convened 16 different task forces for offering industry-specific examples of how to apply the ASC 606 standard. Covering industries as disparate as aerospace/defense, telecommunications, software and not-for-profit, this should be a good place for your accounting department to get hints on the nuts-and-bolts of implementation in your given area of business.
After all the detailed, deep dives you've been taking into accountant-speak to better understand the demands of ASC 606, you might want to take a step back and refresh yourself on the simple, clear advantages of automating operations – for the purposes of ASC 606 compliance and overall business streamlining. This article can help you do that.
Accounting Today offers a clear assessment of how implementing the right kind of automated tools to replace spreadsheets and other manual methods of managing revenue reporting will save money. Reading this, you'll get a better feel for ASC 606 compliance not just as one more regulatory burden you have to take on, but as an opportunity to reassess and retool your operations to do business more securely, effectively and profitably.
At the foundation of so much of what is required to meet the new burden imposed by ASC 606 is technological streamlining. And a part of that is the ability to have everyone across an enterprise get a convenient, transparent view into every contract a business has with a customer or vendor.
The biggest names and the most insightful resources on ASC 606 compliance are all pointing to one thing: regardless of the industry you're in or the type of customer you serve, automated processes are key to meeting the new revenue recognition benchmarks.
So as you start to pursue compliance, treat it as a chance to reevaluate all the bulky manual processes hiding in plain sight throughout your enterprise. While there's a lot of granular detail in ASC 606 as pertains the highly technical world of accounting, there's also one simple thing to remember – automation is the path to full enterprise transparency, and transparency is the key to compliance.
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