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According to Compliance Week, RevRec Still Has a Ways to Go

Tue, Oct 16, 2018 @ 10:02 AM / by Bramasol RevRec Team

RevRecReady-HotTip-12-1A recent article in Compliance Week paints a different picture from people who think that adoption of Revenue Recognition per ASC 606 is behind us.  Even though the new standard took effect on January 1, 2018, the issue of compliance as seen by auditors and the SEC is now just ramping up.

Public companies on calendar year accounting have now completed two quarterly filings under the new standards but the first year-end filing under the new standard is still some months away.

Some highlights from the article include:

According to Eric Knachel, a senior partner at Deloitte and Touche, the two most commonly used words appearing in SEC comment letters thus far are "expand and clarify". 

For those companies that implemented RevRec using ad hoc spreadsheets as expedient "shortcuts" the words expand and clarify can be pretty frightening.

Sean Prince, a senior manager in the national office at Crowe, says the general message he’s hearing is that companies need to improve their disclosures, especially around significant judgments under the new standard. Comment letters seem to suggest the SEC staff is not clear on how companies are arriving at their conclusions, he says.

Here again, the lack of an integrated RevRec compliance methodology that leverages flexible analytics capabilities can make it very difficult for companies to "show their work" to help the SEC understand how the conclusions were reached.

SEC staff reported to audit firms via the SEC Regulations Committee at the Center for Audit Quality that they hope to see better disclosures at year-end than they’ve seen so far in first- and second-quarter reports. 

Companies that have already taken advantage of an advanced solution such as SAP Revenue Accounting and Reporting (RAR), will have the agility to adapt and expand their reporting relatively quickly, but those that are using off-line ad hoc methods will not.

Read the full article in Compliance Week here. ComplianceWeek

While the article carries an important message, it doesn't have to be frightening, even if you haven't yet implemented an integrated RevRec solution. 

At Bramasol, we've been leading the industry in adoption of sustainable RevRec solutions that use RAR along with integrated SAP Analytics Cloud functionality to provide agile and adaptable disclosure reporting.  Ranging from extensive custom functionality to very targeted and affordable purpose-built disclosure applications, we span the gamut of requirements.  We've even created targeted solutions for companies that previously took the "spreadsheet shortcut" and now need to get on to a more sustainable compliance path.

Check out the links below for a look at these pre-built offerings.  Don't hesitate to contact us if you need something more or just have questions about how to move forward.

Get Bramasol's RevRec Analytics and Disclosure App Now Available on SAP App Center

Learn about Bramasol's RevRec Ready Rapid Compliance Solution

Topics: revrec hot-tips, revenue recognition, ASC606

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