On March 20, 2018, Amy Hover, Managing Director with MorganFranklin Consulting, joined a panel presentation to discuss the new revenue recognition standard at a meeting of the Technology Executives Roundtable in Atlanta. The panel included Sean Lager of accounting firm Frazier & Deeter, LLC, Paul Arne and Alexander Woollcott of law firm Morris, Manning & Martin, LLP, and Ted Alexander, Director of Sales Operations Revenue with Hortonworks, a vendor of enterprise-ready open data platforms and modern data applications.
The panelists acknowledged the challenges in adopting the new standard while emphasizing the benefits of a collaborative process that involves key stakeholders within the company and external auditors, legal counsel, and outside consultants. The new standard is principles-based rather than a set of prescriptive rules. One size does not fit all. Rather than applying clear-cut rules, companies have the opportunity to consider and adapt the principles in the new standard to their specific facts and circumstances to develop policies that best reflect the operating results of the enterprise.
While public companies were required to adopt the new standard at the beginning of fiscal years starting in 2018, most private companies are currently in the midst of the adoption process and will adopt at the beginning of 2019. Time is running short to effectively make the transition. Private companies that are not well underway in adopting the new standard should make it a focus to assemble the necessary team of internal and external participants and start the process as soon as possible. Time invested early in the process will ensure better outcomes upon adoption.
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Identify the strategic opportunities in compliance
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Several methods may lead to compliance with the new ASC 606 revenue recognition standard, but only one is best for your company’s future growth. See how we can help you adopt ASC 606 by the fast-approaching deadline for private companies.