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Revenue recognition: The way forward

Deloitte and Bloomberg BNA conference

​In May 2017, Deloitte and Bloomberg BNA collaborated to bring business leaders and financial reporting regulators to discuss the new revenue recognition standard—Accounting Standard Codification (ASC) 606—which will change the way many companies book revenue. Are you ready?

Findings from the 2017 conference

What we learned: Many public companies are viewing January 1, 2018—the effective date for the new revenue standard—with as much anxiety as anticipation. As evidence, more than two-thirds of conference poll respondents were still assessing the standard’s impact on their businesses—or worse, hadn’t started the process altogether.

Accounting departments may serve as the front line, but the new standard’s effects will be companywide. Panelists agreed that it will be implemented through an interconnected web, encompassing all areas of the corporate hierarchy, including information technology (IT), legal, human resources, and several other departments.

Download the executive summary of the conference.

Watch interviews form Deloitte subject-matter leaders

In interviews conducted by Bloomberg BNA during the conference, Deloitte leaders discussed the standard in further detailpreparing for operational challengesworking with your auditor, and the effects on life sciences companies.

Eric Knachel—senior consultation partner in the professional practice network, Deloitte & Touche LLP—talks with Laura Salisbury, reporter at Bloomberg BNA, about the challenges of determining the best-estimated selling price of performance obligations and how a conceptual framework for revenue recognition can aid companies in their efforts. Knachel’s lengthy submergence in the waters of the new standard helped to give viewers transparency on the challenges their companies might endure.

Bryan Anderson—partner, accounting and reporting transformation, Deloitte & Touche LLP—discusses how to prepare for the operational challenges associated with the new revenue recognition standard. He also provides a glimpse of the decisions behind using a full- vs. modified-retrospective approach.

Amy Holcomb—audit managing director, Deloitte & Touche LLP—talks with Todd Cheney, accounting editor at Bloomberg BNA, about the potential effects of the added judgments, estimates, and disclosures required of companies as a result of the new revenue recognition standard. She sheds some light on questions companies might face from their auditors as they implement the contemporary rules.

Dennis Howell, senior consultation partner with Deloitte & Touche LLP, addresses aspects of the new revenue recognition standard and its effect on the life sciences industry. He gives examples of revenue from licensing and sales of intellectual property as well as notes some structural concerns of which financial statement preparers ought to be aware.

Implementing the new standard is fast becoming a fire drill. From establishing a budget to ensuring proper data collection and testing system modifications, the implementation process requires substantial time and resources. Companies should not underestimate what a significant undertaking implementation will be.

— Eric Knachel, Deloitte & Touche LLP​

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