You must admit that your colleagues here at Embark are persistent. Whatever your preferred cliché might be – the squeaky wheel gets the grease, the barking dog gets fed, the insistent accountant remains compliant (fake but apropos) – we have embraced it with vigor and zeal. Given the high stakes, there’s consolation in knowing we have done our best to help guide you through the somewhat murky waters of ASC 606.
Between our highly informative e-book on the matter and a consistent stream of blog posts, we hope you have taken appropriate measures and are well on your way towards integrating the solutions that work best for your company. For now, a summary of the ASC 606 revenue recognition timeline will help you track your progression through the process.
What Should Have Been Done Yesterday
2015 should have been spent assembling your game plan and identifying what members of your team will play roles in the process. All involved parties should have been pulled into the discussion to make the process as efficient and cohesive as possible.
According to the timeline, 2016 was best served spent identifying your revenue streams, how they’re currently being recognized, and seeking the input of your external auditors. SAB 74 disclosure should have occurred sometime throughout that year. Also, identifying which of your revenue streams will have a material impact was key to moving forward in the process.
Today and Tomorrow
Assuming everything has gone swimmingly thus far, that takes us to this current year. The first half of 2017 should have ideally been spent identifying the systems and controls that will be impacted by ASC 606. SAB 74 disclosures throughout the year should continue to become more robust and detailed. The final two quarters of the fiscal year should focus on training your team to ensure compliance with the new standards.
Be deliberate and take your time to educate everyone affected by the changes so the transition will be as smooth as possible. Once you're up and running on the new procedures, constantly monitor the output for consistency and adherence to the standards, making any necessary changes along the way.
With ASC 606 disclosure due the first quarter of 2018, time is obviously getting skinny. Between now and then, carefully inspect your controls to make sure there are no gaps or deficiencies in your business controls and ITGC. Lastly, make sure your external auditors agree with the process and the output is compliant and effective.
Granted, industries like oil and gas might not bear the same brunt of ASC 606 as others but, at the very least, everyone needs to be ready for the changes, no matter how big or small. Check out our e-book, get organized and dive in because the deadline will be here sooner than you would probably prefer.
For a quick reference, we've created this revenue recognition timeline: