The Financial Accounting Standards Board (FASB) has issued a new Accounting Standards Update (ASU) intended to improve financial reporting about leasing transactions, which affects all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment.
One of the key first steps for implementing the new Revenue Recognition standard is to determine which adoption method, full retrospective or modified retrospective, will be used. This key decision will depend on several factors including resource availability, reporting requirements, and timing of the project. When you convert to the new method of recognizing revenue, the previous years of recognized revenue need to be migrated over so that you have the complete picture for ongoing contracts and revenue streams.
Revenue recognition compliance deadlines are coming fast – gain insights on how to comply with and benefit from the new standards using SAP Revenue Accounting and Reporting
When evaluating how you will capture the required data, there are many considerations to include. Based on what we have seen with our customers, the gathering of information falls into three key categories:
As companies prepare for the new standard, a common trend can be seen: most companies undertake a Proof of Concept. There are many reasons for this, but the top 5 reasons can be grouped as follows:
Are you Rev Rec Ready?
In 2018, all public companies will need to comply with the new FASB/IASB accounting standards for revenue recognition. Whether you are in telecom, pharma, media and entertainment, manufacturing or software you are affected. And it’s not just IT, but every department from finance to sales, operations and support to R&D will be affected by the new standards. And the changes will impact how you account for selling price, commissions, warranties, loyalty programs and licensing and royalties.
This new LinkedIn group is designed to help companies share ideas, best practices and tools to help us all get Rev Rec Ready. Join us and please contribute to the discussion.
SAP Revenue Accounting and Reporting 1.1 has now been released for General Availability (GA) effective Feb 5, 2016. SAP RAR was developed closely with customers and co-innovators like Bramasol, as well as SAP’s internal accounting department, by analyzing the new revenue recognition standard and assessing how best to design an integrated solution to cover the new requirements.
