This week’s edition covers both relevant news articles as well as a recent comment letter/company’s response on ASC 606.
To quickly identify ASC 606 information in the below links, click on the link, hit Control + F, enter the text “606” or “2014-09”, and click the down arrow button.
Are you reading these weekly rev rec blogs? If so, please let us know what you think in the comments section; we will tailor future weekly roundups to the most relevant, timely, content based on feedback from you! And as always, feel free to reach us at: http://www.softrax.com/about/contact-us to learn more about SOFTRAX and the value we can provide for your company’s ASC 606 adoption!
Compliance Week, “New standard triples revenue disclosures, Deloitte finds”, by Tammy Whitehouse:
Our thoughts: Brief, informative article discussing the results of an analysis done by Deloitte on public companies that filed under ASC 606. Beyond discussing the increased level of revenue disclosures in such filings, it touches on key ASC 606 topics such as how such companies handled presenting information on election of practical expedients and the dis-aggregation of revenues. This article is worth the 5-minute read.
DIGINOMICA LTD, “5 ways ASC 606 changes how services companies book revenues”, by Gordon Stuart:
Our thoughts: This article is unique in its perspective from the company's CFO, who provides direct input as the accounting and finance leader. In terms of content, its “What service companies can expect under ASC 606” section has high value as a to-the-point, quick, read.
Journal of Accountancy, “FASB memos shed light on private company revenue recognition issues”, by Ken Tysiac:
Our thoughts: This content-rich article focuses on memos issued by the FASB as a result of concerns raised in January by the AICPA Technical Issues Committee (TIC). It offers leading indicators to illuminate how FASB is thinking about these key issues and what private companies should expect as their ASC 606 adoption date gets closer.
DELTA AIR LINES, INC., 10-Q:
- The bottom of page 6 through the top of page 7 offers a quick snapshot of how the company adopted ASC 606 and its impact.
- The company adopted using the full retrospective method.
- While there were no material effects on earnings, the company explains how it had to reclassify $2 billion in revenue because of ASC 606.
- The impact ASC 606 had on the company’s accounting for frequent flyer miles is discussed.
- The filing offers details on the company’s revenue recognition policies under ASC 606 in quantitative and qualitative forms from the bottom of page 8 through page 11. This supplements the high-level ASC 606 impacts discussed on pages 6 and 7.
Our thoughts: Although this filing offers a limited number of references to ASC 606, the areas that do discuss ASC 606 pack a nice punch. Most notably, it’s instructive to read how ASC 606’s performance obligation concept led to the company reclassifying revenues.
LEVI STRAUSS & CO. 10-Q:
Our thoughts: While this company has not adopted ASC 606 yet, its filing does present a multi-paragraph section on page 8 explaining what the company is doing to prepare and implement ASC 606, pointing to the areas of guidance applicable to the company. It’s a good write-up on how a company can present its status on ASC 606 even if it has not reached its adoption date yet.
ASC 606 is not a challenge your company has to face settling for limited functionality in existing systems or through high risk manual efforts. SOFTRAX provides superior experience, knowledge, products, and services to address your company’s ASC 606 needs. We encourage you to visit http://www.softrax.com/about/contact-us to learn more about SOFTRAX and the value we can provide for your company’s ASC 606 adoption.