One year ago, Josh Paul, Head of Technical Accounting & SEC Reporting at Alphabet says, “Hopefully, fear is what you’re feeling now.” Strong words for public companies on a topic that vastly changed the way they did business. In the 11 months since the Forbes article on ASC 606, public companies have faced the new reality of this major change to GAAP, and now private companies are bracing for the change.
Big Changes… Business Changing Decisions
While privately traded firms won’t have nearly as many contracts as organizations such as Verizon (for whom it took 3 years to prepare) or Workday (who hired a dedicated team of accountants to review 6,000 contracts), big changes are in order and even if you won’t be dealing with the same number of contracts as some of these massive firms, you also don’t have the same resources that they do.
Knowing this, if you haven’t taken the steps to change your processes and contracts, it’s crunch time, and it’s going to be a stressful few months as you scramble to change your business—and we mean change your business completely. ASC 606 is a huge change, and is considered to be the biggest shift since Sarbanes-Oxley:
“It impacts every aspect of how you go to market and run the business, requiring changes in systems, processes and reporting both internally and externally to investors both public and private,” says Hortonworks CFO Scott Davidson. “It’s a very heavy lift for us.”
The standard is designed to simplify (and which will simplify) the processes in the long run by standardizing everything about contracts across industries. However, it gets much harder before it gets better, as it is set to make the first reporting period much more complex.
How Will ASC 606 Affect You?
In the coming weeks, we will take another look at the new standard, digging into some of the top resources from our parent company Wipfli while sharing information on the importance of acting now—especially if you will need to upgrade your ERP platform (something that many companies have found is a necessity to handle their contract changes). Ready to learn more? Get in contact with us and read our guide to ASC 606 preparation.
Read the resources below to prepare:
- ASC 606/IFRS 15: Pros and Cons of Full and Modified Retrospective Adoption Methods
- Reassessing Budgeting and Planning in the Wake of ASC 606
- Beyond Accounting: 5 Departments Affected by ASC 606/IFRS 15
- How to Know If You’re Ready for New ASC 606 Standards
- What’s New in Sage Intacct in Q2 2018? Release Notes and Elevate Invitation