Are You Prepared for the New Revenue Recognition Standards?

FASB ASU 2014-09, Revenue from Contracts with Customers (Topic 606) is effective for private companies for the calendar year 2019. The new accounting standard will significantly change US Generally Accepted Accounting Principles (GAAP) and is expected to have an especially dramatic effect on certain industries. The time involved to learn, plan and implement the new standard could be significant and the effective date of implementation is fast approaching.

Getting Ready for the New Standards

If you have not already done so, it is important to communicate with your accounting, tax, cost consultants, etc. on how the new standard will impact your company, including what new practices and internal controls to implement and apply the new standard. Items to consider:

  • Learn the new revenue recognition rules.
  • Determine what contracts fall under the new standard by applying the 5-step model.
  • Determine if a change in revenue recognition will impact debt covenants, revenue requirements, or other agreements. 
  • Consider if any business practices or contracts should be changed or modified.
  • Begin drafting footnote disclosures to help identify information that will need to be tracked to ensure the company has the data necessary to adopt and disclose the new revenue standards.

The following articles, podcasts, and webinars provide more detailed information regarding the new revenue recognition standards:

Article – New Revenue Recognition Rules

Webinars – ASC 606 Webinar – Part 1 and Part 2

Podcasts – Revenue Recognition Steps 1 to 5

Please contact our office, 517.323.7500, if you would like to discuss the impacts of the new revenue recognition standard.