John WickeCPA, PMP, CPCU, CGMA| RetiredOcean, Nj, United States
Successful implementation of the Accounting Standard Updates on Revenue Recognition and Leases will require close and continuous coordination between Sales, Legal, Operational, IT and Accounting functions to ensure that the:
• Five revenue recognition steps are correctly applied to past and future revenue transactions
• Specified lease criteria properly classify each current and future lease as one of three lease-types and accurately captures almost all leases on the balance sheet.
Future contractual terms, existing business processes and front-end systems may require modification to achieve compliance with the two Accounting Standard Updates along with a recognition that general ledger system changes, alone, will not be sufficient to implement these Updates Saving Changes...
Hopefully, if you work for a publicly traded company, you are already in production with RAR (ASC 606 & IFRS 15). MEAs (Multi-Element Arrangements) can be challenging. If you're a private company, get started NOW, if you haven't already - it takes longer than you might think.
For Leasing, you have until December for ASC 842 and January 2019 for IFRS 16, if I recall correctly. Again, private companies get an additional year. Leasing does not seem as complex as RAR has been, but I'm expecting challenges interfacing 3rd party apps with SAP. Saving Changes...
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