Webcast recap: Business and professional services revenue recognition
In our recent webcast on revenue recognition considerations for business and professional services organizations, discussion focused on how the new revenue recognition guidance in Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers, affects the industry, key dates for implementation, and potential challenges associated with adopting the new guidance. Central to the new standard is the following five-step model for recognizing revenue:
- Identify the contract with a customer
- Identify the performance obligations in the contract
- Determine the transaction price
- Allocate the transaction price to the performance obligations
- Recognize revenue when (or as) each performance obligation is satisfied
Each of these steps involves detailed evaluation and documentation. Watch the clip below as presenter Jodi Brown, RSM senior manager, details important considerations for business and professional services organizations when applying Step 5.
The new guidance must be implemented by private entities with calendar year ends no later than in their Dec. 31, 2019 financial statements. Adoption efforts provide an opportunity to consider strategic operational issues such as improving efficiency, enhancing information systems and strengthening processes and controls.
Visit our revenue recognition resource center for additional insights on this topic. Questions? Contact us for more information.
Two executives discuss their experiences implementing ASC 606 and draw the same conclusion: It takes more time than you expect.
Our comprehensive guide on ASC 606 includes in-depth discussion and many examples on the new revenue recognition model.