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RevRec: FASB Update Regarding Principal vs Agent Considerations

Posted by Bramasol RevRec Team on Mon, Dec 4, 2017 @ 01:25 PM

RevRecReady-HotTip.jpgFASB Issues Accounting Standards Update 2016-08

Revenue from Contracts with Customers
Principal versus Agent Considerations

An issue discussed by the Transition Resource Group (TRG) for Revenue Recognition relates to when another party, along with the entity, is involved in providing a good or a service to a customer.

In those circumstances, Topic 606 requires the entity to determine whether the nature of its promise is to provide that good or service to the customer (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent).

This determination is based upon whether the entity controls the good or the service before it is transferred to the customer. Topic 606 includes indicators to assist in this evaluation. Discussions at TRG meetings informed the Board about implementation issues related to the guidance on principal versus agent considerations, including:

  1. Identifying the unit of account at which an entity should assess whether it is a principal or an agent
  2. Identifying the nature of the good or the service provided to the customer (for example, whether it is a good, a service, or a right to a good or service)
  3. Applying the control principle to certain types of transactions, such as service arrangements 4. Interaction of the control principle with the indicators provided to assist in the principal versus agent evaluation.

To address those issues, the Board decided to add a project to its technical agenda to improve Topic 606 by reducing:

  1. The potential for diversity in practice arising from inconsistent application of the principal versus agent guidance
  2. The cost and complexity of applying Topic 606 both at transition and on an ongoing basis.

Who Is Affected by the Amendments in This Update? The amendments in this Update affect entities with transactions included within the scope of Topic 606. The scope of that Topic includes entities that enter into contracts with customers to transfer goods or services (that are an output of the entity’s ordinary activities) in exchange for consideration.

For more information, read the FASB Update here.

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Topics: revrec hot-tips

Ease the Burden of Disclosure Reporting with Pre-Built Reports

Posted by Bramasol RevRec Team on Mon, Nov 13, 2017 @ 05:26 AM

RevRecReady-HotTip.jpgThere is less than two months before the mandated adoption of new Revenue Recognition standards ASC 606 and IFRS 15. Since companies need to comply with legal disclosure reporting requirements, including a retrospective dual-reporting period between current ASC 605 and new ASC 606, it is critical that you have a clear disclosure reporting plan in place, NOW!

Using SAP Revenue Accounting and Reporting (RAR) as the engine to track sales contracts and revenue recognition enables implementation of ASC 606 requirements within SAP ERP/ECC, S/4HANA Cloud or 3rd Party ERP environments.  RAR also facilitates the ability to create highly-flexible analytics to provide companies with the specific quantitative information needed to fulfill statutory reporting requirements.

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As the leading co-innovator with SAP on the development of SAP RAR, Bramasol has more SAP RAR implementation projects and active live SAP RAR sites than anyone in the industry.  Bramasol has created a rich set of management and visualization tools to enhance the modeling, pilot, implementation and transition processes. SAP RAR can go-deep on any aspect of revenue recognition and the Bramasol enhancements are designed to visually surface any set of relevant information needed to support accurate understanding and timely decision making.

With Disclosure Reporting now on the near horizon, Bramasol has once again taken proactive steps to help companies stay ahead of the curve by developing a collection of specific reports for public entities to meet ASC 606-10-50x disclosure reporting requirements.

Bramasol’s end-to-end integrated solutions for revenue recognition compliance fit seamlessly within any existing operational and financial systems while providing the detailed information, audit trail, aggregation methodologies and advanced analytics to support statutory disclosure reporting. 

Click Here to Download eBook on RevRec Disclosure Reporting

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Topics: revenue recognition, revrec hot-tips, SAP RAR

Structured Data Migration is Critical for Revenue Recognition Compliance

Posted by Bramasol RevRec Team on Mon, Oct 23, 2017 @ 06:04 AM

RevRecReady-HotTip.jpgNew Revenue Recognition standards, ASC 606 and IFRS 15, are mandated to take effect in January 2018, which is now less than three months away. 

Companies that are serious about achieving compliance should already be actively immersed in the data migration process.  Unfortunately, many companies are struggling with how to go about this key factor for success.

Data Migration is essentially the process involved with copying an organization’s key data from one device to another device ideally without disturbing or deactivating live applications.

As an industry leader in implementation of the new RevRec standards, with extensive experience in change management, Bramasol has developed a proven, structured methodology for Data Migration, which was detailed in our recent webinar on September 28, 2017.

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Click Here to View the Webinar Video on "SAP RAR Data Migration and Reporting".

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Topics: revrec hot-tips

Less than 90 Days Left for RevRec Compliance

Posted by Bramasol RevRec Team on Sat, Sep 30, 2017 @ 09:53 AM

RevRecReady-HotTip.jpgThe new Revenue Recognition standards (ASC 606 and IFRS 15) are mandated for implementation by January 1, 2018.  Yes, that is less than three months from now! 

Time is rapidly running out an the clock not your friend!

Companies that haven't already started projects are now dangerously behind. In fact, it's way too late to start a custom revenue recognition solution from scratch.

If you're all set and fully #RevRecReady - Congratulations!

If not, here are some resources that can help:

If you need personalized help or just want to bounce some questions off an expert, contact us.

Request RevRec Consulting Support

 

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Topics: revenue recognition, revrec hot-tips, RevRec hot-news

Per WSJ: Many Companies Are Falling Behind on RevRec

Posted by Bramasol RevRec Team on Wed, Jun 14, 2017 @ 10:37 AM

RevRecReady-HotNews.jpgThere are only six months left before the mandated adoption of new Revenue Recognition standards ASC 606 and IFRS 15.

Since companies need to comply with legal disclosure reporting requirements, including a retrospective dual-reporting period between current ASC 605 and new ASC 606, it is critical that you have a clear disclosure reporting plan in place, NOW!

The Wall Street Journal (WSJ) published an article on June 5, 2017 titled "Tech Teams Rush to Catch Up as New Accounting Rule Looms", which provides an excellent overview of what companies are up against as the countdown clock races toward the January 2018 deadline.

Here is a key excerpt from the article:

"For large corporations, the task is arduous and complicated: Accountants are scouring thousands of bills and contracts to determine if they must change how they book the sales for fiscal years beginning after Dec. 15. Meanwhile, tech departments are writing new code, upgrading their systems and investing in expensive new software as they work to ensure their increasingly automated finance operations can keep up.

It’s not clear all of them can.

For large corporations, the task is arduous and complicated: Accountants are scouring thousands of bills and contracts to determine if they must change how they book the sales for fiscal years beginning after Dec. 15.

 

Meanwhile, tech departments are writing new code, upgrading their systems and investing in expensive new software as they work to ensure their increasingly automated finance operations can keep up.

It’s not clear all of them can."

The article also states that: "Large companies often have legacy IT systems cobbled together over decades and through multiple acquisitions. Changing something as integral as revenue recognition often means dismembering the complex systems and then putting them back together".

Overcoming these challenges is the primary goal of SAP Revenue Accounting and Reporting (RAR), which was designed from the bottom up as a powerful, flexible RevRec reporting engine that can be used with existing SAP ECC and a wide range of 3rd Party ERP and legacy financial systems.

As a co-innovator with SAP on the development and deployment of SAP RAR, Bramasol is the industry leader in helping companies come to grips with the reality of the new RevRec standards.

Part of our work on this topic has been hosting a series of monthly Revenue Recognition Webinars for over 18 months. Click Here to view Videos of Past Revenue Recognition Webinars.

To learn the latest about Disclosure Reporting and the Dual-Reporting requirements referenced above, click below to register for June 28 Webinar on Dual-Reporting with SAP RAR.

Register for June 28 RevRec Webinar Dual-Reporting with SAP RAR

 As the leaders in SAP RevRec we can help you be prepared and ready…  

Call us at (866) 625-9878 or Click Below to Request RevRec Help

Request RevRec Consulting Support

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Topics: revrec hot-tips, RevRec hot-news

Rev Rec Hot-Tip: It's now too late to start a custom Rev Rec Solution.

Posted by Bramasol RevRec Team on Tue, Oct 18, 2016 @ 08:07 AM

RevRecReady-HotTip-12.jpgWith the new Revenue Recognition standards (ASC 606 and IFRS 15) mandated for implementation by January 1, 2018, companies that haven't already started projects are falling dangerously behind. In fact, it's now too late to start a custom revenue recognition solution from scratch.

In a recent article in Compliance Week, Thack Brown, general manager and global head of line of business finance at SAP, put it this way. "CFOs are facing a perfect storm of accounting regulation, with three major IFRS standards converging in rapid succession, Time to implement these new processes is running out.”

“It takes approximately 18 months for the average Fortune 1000 company to make a change of this magnitude, and we just passed that point in the countdown to the mandatory effective date of the new standards, Corporate finance departments should act now to ensure that they are prepared for the transition and have the right tools to automate and simplify the process.”

That's why so many companies are turning to SAP Revenue Accounting and Reporting (RAR) to streamline their implementation and transition to the new standards.

New features in the SAP Revenue Accounting and Reporting 1.2 release include cost recognition, capitalized costs integration with project systems and results analysis from SAP, improved contract combination and modification capabilities, and integration with service and billing scenarios in the SAP Customer Relationship Management application, plus advanced features for transition to the new IFRS 15/ASC 606 accounting standards.

Request RevRec Consulting Support

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Topics: revenue recognition, revrec hot-tips

Rev Rec Hot-Tip: If you run SAP, you already own SAP RAR

Posted by Bramasol RevRec Team on Thu, Sep 22, 2016 @ 05:48 PM

RevRecReady-HotTip-11.jpgAs you know there are contract revenue reporting changes coming up January 1, 2018.  These are under ASC 606 and IFRS 15.

If you have SAP, you already own a solution as part of SAP FICO called Revenue Accounting and Reporting (RAR).

Depending on the complexity, the implementation is 6-12 months. 

To perform parallel reporting before January 2018, a solution needs to be in place by mid 2017.   

Click below if you'd like to learn how SAP RAR can help you get #RevRecReady

Request RevRec Consulting Support

 

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Topics: revenue recognition, revrec hot-tips

RevRec Hot-Tip: Account Determination is Key in SAP RAR

Posted by Bramasol RevRec Team on Wed, Aug 10, 2016 @ 08:00 AM

RevRecReady-HotTip.jpgAccount Determination is a critical step in transitioning to the new ASC606 and IFRS15 revenue recognition rules using SAP Revenue Accounting and Reporting (RAR).

In SAP RAR 1.2, certain account determination rules derive the target account for the target accounting principle from a reference account that exists under a specific accounting principle, known as the "base accounting principle".

The reference accounts passed from the logistics system are only for the base accounting principle. Therefore, you can use a different set of rules to determine the reference accounts for accounting principles other than the base accounting principle. These reference accounts are used to make postings for recognizing revenue. They are also used as an input to the other account determination rules (allocation difference, allocation difference for linked performance obligations, and right-of-return adjustment).

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For each revenue-related posting, the system provides a reference account as the starting point of the account determination process. The reference account is provided as the input of your determination rules. This account usually comes from outside Revenue Accounting and varies depending on the type of account that needs to be determined. For example, when determining the account of the Receivable Adjustment account, the system uses the Accounts Receivable account (defined in the master data of the customer record) as the reference account, so your determination rules can use that account to derive the account that will eventually be used.  Your rules can disregard the reference account and use other fields as the criteria.

To learn more about the details of Account Determination and the implementation of SAP RAR 1.2 you can request a free consultation.

Request RevRec Consulting Support

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Topics: revenue recognition, revrec hot-tips, SAP RAR

RevRec Hot-Tip Video: "How to Download SAP RAR 1.2"

Posted by Bramasol RevRec Team on Fri, Aug 5, 2016 @ 12:00 AM

RevRecReady-HotTip.jpgBramasol has just released a new quick tutorial video on "How to Download SAP RAR 1.2".

Click here to watch this short 7-minute how-to video.

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Topics: revenue recognition, revrec hot-tips

RevRec Hot-Tip: If you plan to run parallel for six months, you've got Less Than a Year to Be Ready!

Posted by Bramasol RevRec Team on Tue, Jul 5, 2016 @ 09:00 AM

RevRecReady-HotTip.jpgThe January 1, 2018 deadline is fast approaching and more and more companies are looking at their plan for implementing the new standards (ASC 606 and IFRS 15).

But, since a prudent approach for most companies also includes running parallel financial processes for two fiscal quarters, the time left to get ready is not actually 18 months - it is really now less than a year!

Those companies that are on a path to be #revrecready already should have formed their core teams, assessed their data, and started a Proof of Concept to model the changes.  

Is your company on the path to #revrecready success or falling behind the curve?

Join the Rev Rec Ready LinkedIn Group

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Topics: revenue recognition, revrec hot-tips

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