This week’s edition pivots to a few recent articles that discuss ASC 606. We’ll be back to focusing on SEC filings and comment letters soon but wanted to change up this week’s content as a value-add for our readers.
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.
As always, please let us know what you think as we will tailor future weekly roundups to the most relevant, timely, content based on feedback from you, and as always, feel free to reach out to us to learn more about SOFTRAX and the value we can provide for your company’s ASC 606 adoption!
Compliance Week, “IRS gives partial guidance on revenue recognition”
Our thoughts: This article’s focus on the tax implications of ASC 606 is a solid read. Specifically, it discusses recent IRS guidance regarding revenue recognition that is leading to more questions than answers. Additionally, it discusses how a company must get approval from the IRS to change its accounting methods for revenue recognition for the purposes of tax even though it’s adopting a FASB-issued revenue recognition standard. Furthermore, the article discusses how the introduction of variable consideration in ASC 606 leads to complexities from a tax point of view.
Wall Street Journal, “New Accounting Rules Change How Some Companies Sell Goods, Services”
Our thoughts: This article offers an overview of how ASC 606 promoted changes to how companies operated and sold products/services. Companies used as examples in the article include Dunkin’ Brands Inc., Red Hat, and Ciena Corp. While the article is high-level on ASC 606 requirements, it does offer a baseline perspective on the financial and operational processes impacted by ASC 606.
Our thoughts: Reviewing earnings conference call transcripts offers additional perspectives on how ASC 606 is being handled by companies. Guidewire Software and VMware included multiple references to ASC 606 within each call. Additionally, the types of questions analysts asked pertaining to ASC 606 can give additional perspectives on what boards, executive management, investors, and auditors could inquire about related to ASC 606.
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 contact us to learn more about SOFTRAX and the value we can provide for your company’s ASC 606 adoption.