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.
If you're planning to attend SAP Insider Financials 2016, Bramasol is happy to help you SAVE $200 on your registration! Simply click here or on the image below.
Bramasol, the leader in SAP Revenue Recognition, is now offering SAP RAR in the Cloud Solutions to help you get Rev Rec projects up and running quickly.
View RevRec as an Opportunity to Transform and Improve Processes
The extent of impacts will vary by industry and by organization within the industry, but all companies will be impacted. Some of the changes this will cause include additional or expanded disclosures, the inclusion of additional estimates and judgments in external Financial Reporting, and most likely new or modified business processes and controls.
It is important to note the last impact item from above: new or modified business processes and controls. The new standard is not just an accounting exercise, but rather extends well past technical accounting into core business processes.
To get lots of detail on how to leverage these opportunities,, click here to read Larry McKinney's blog post "Revenue Recognition Projects: Driving Transformational Actions" on LinkedIn Pulse.
Read all of the RevRec Ready Hot Tips here.
In the Five Step Revenue Recognition process, Step Four requires that entities allocate the Transaction Price to each Performance Obligation (POB) based on its relative Standalone Selling Price. The Standalone Selling Price is the price at which the entity would sell a good or service separately to a customer.
Depending on the contract terms and conditions of a sale, products that have been sold by a seller to a buyer may have a potential Right of Return. The potential return of merchandise by a customer must be accounted for in accordance with GAAP (Generally Accepted Accounting Principles) whenever a buyer has a future Right of Return. This may be in accordance with formal or informal agreements between buyer and seller.
According to revenue recognition regulations, when a Right of Return exists, a seller may or may not be able to recognize all of the revenue at the time of sale.
