ASC 606 Revenue Recognition

This far-reaching accounting standard impacts many organizations, and more intensely than most anticipated.

Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, affects a broad spectrum of organizations (also see ASU 2014-09), including construction, insurance, healthcare, manufacturing, not-for-profit, real estate and technology companies. Many organizations see the most impact in the manner in which they need to account for their revenue, not in the final revenue on their financial statement.

Services

Our industry specialists can help you understand how revenue recognition will affect your organization’s revenue streams, contracts, systems, internal controls, and help you prepare for implementation in this incredibly complex area. Services include:

Risk assessment

What revenue streams should you be focusing on?

You need to understand what your current revenue stream types are, and which of those revenue streams pose a risk of high impact.

Impact assessment

How will your systems, processes, controls be affected?

Once your revenue streams are identified, our team will work with your stakeholders to begin a detailed inventory and assessment of your contract types, specifically focusing on those contract types identified in the initial assessment as high impact.

Gap analysis

What do you need to address to comply with ASC 606?

Based on the impact assessment, our professionals will analyze processes, systems, controls, and reports for gaps between what is currently in place and what you need to do to comply.

Roadmap development

What is the right path for your company to pursue?

Our multidisciplinary team will work with you to discuss strategy options, determine a plan that is the right fit for your organization, and develop the project plan to implement your strategy.

Implementation

What should you expect in implementing your solution?

Once your strategy is determined and a plan established, our project management and change management professionals will assist you in an implementation managed specifically to your organization’s culture and its needs.

Internal controls evaluation

Have you addressed all controls?

After your solution has been implemented, internal controls must be tested and evaluated for deficiencies. As part of your ongoing management and testing, our professionals can assist with evaluation of your revenue-related internal controls against the COSO 2013 framework.

Tax accounting methods consulting

Do you need to change your accounting method?

Once you have determined your organization’s revenue recognition strategy, you may find that you need to file an accounting method change to comply with IRS requirements. Our tax professionals understand these complexities and can steer you to the right solution.

© 2024 Baker Tilly US, LLP