ASC 606, with its directive for a single worldwide standard, turned revenue accounting on its ear. Formally titled “Revenue from Contracts with Customers,” the Financial Accounting Standards Board guidance affects companies of all sizes, both private and public. Its requirements impact systems, processes and culture.
For businesses, ASC 606 demands more management judgments and estimates in financial statements; requires changes to how companies conduct finance, sales, internal controls and IT functions and can affect results depending on companies’ legacy reporting procedures and the contractual framework within their respective industries. In addition, audit firms need updated, audit-ready documents that comply with the requirements of ASC 606 and document clients’ accounting analyses with precision to meet the strict documentation requirements and escalating oversight of today’s financial reporting environment.
Leveraging our experience helping clients resolve revenue recognition issues of all types, Blythe Global Advisors developed a four-phased implementation process to help businesses meet all ASC 606 requirements. It starts with an impact assessment to identify the scope of work for full compliance.
We deliver these services through BlytheTeam®, our alliance of former Big Four partners and executives, industry entrepreneurs and former corporate finance and accounting senior executives and professionals. These experts bring extensive knowledge of U.S. and international accounting principles and regulations, seasoned leadership, project management skills and know-how across a wide range of industries to every engagement. With their corporate experience – many have worked as CFOs and controllers at global organizations – they understand the toll a major change can inflict on an otherwise smooth-running business.
Our turnkey implementation plan includes customizable, flexibly priced solutions, knowledge transfer and measurable results. The four phases cover:
- Impact assessment and strategy: Orientation and level-set, contract reviews, impact study and project plan
- Implementation: Including updated or new systems, policies and/or procedures
- Year-end close: Production of audit-ready documents
- On-going maintenance: Liaison to the audit firm (anticipating needs, reducing costs and providing value up and down the reporting chain), companywide training as needed, etc.
Revenue Recognition Experience
BGA has assisted many companies evaluate revenue recognition accounting policies and practices. For example:
- Helped an IPO-bound technology company recast historical financial statements from IFRS standards to U.S. GAAP in connection with a software acquisition.
- Helped a public medical device company evaluate its revenue recognition policies to adapt its systems, processes and sales incentive programs to comply with ASC 606.
BGA also assists companies in various stages of the IPO process with preparation of technical memos and accounting treatment related to revenue recognition, stock compensation, asset impairment, convertible debt, warrants and complex equity transactions. For example, we helped a private equity-backed company considering an IPO with an evaluation of how the proposed changes to the leasing and revenue recognition standards will impact the company’s financial statement and accounting processes.
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