What Business Leaders Really Need to Know about
the New Revenue Recognition Standard
Don’t Try to do This Without a Safety Net
ASU 2014-09 Revenue from Contracts with Customers (Topic 606) comes into effect this year for public entities and next year for all other non-public organizations. The accounting team members at Ciuni & Panichi, Inc. are prepared to assist all entities with the implementation of this complex standard. The standard was developed to provide a single approach for revenue recognition regardless of industry or type of business. The standard applies to all transactions transferring goods and services to customers and could impact your bottom line in the transition year.
At Ciuni & Panichi Inc., we’ve been building our expertise in the new standard implementation procedure since the FASB announced it in May 2014. Our professional team is ready to answer your questions and help you plan and implement the standard as well as work through the resulting implications. A brief summary of the standard follows.
The Facts
- ASU 2014-09 Revenue from Contracts with Customers (Topic 606) affects everyone, public and non-public entities.
- Effective dates are:
o Public entities – fiscal years beginning after December 15, 2017
o Non-public entities – fiscal years beginning after December 15, 2018 - The standard applies to all customer contracts for revenue recognition with only a few exceptions
- It’s complicated and will require time and effort to understand and implement
Steps in the Revenue Recognition Process
- Identify the contract with a customer
- Identify the performance obligations in the contract
- Determine the transaction price
- Allocate the transaction price to the performance obligations in the contract
- Recognize revenue when (or as) the entity satisfies a performance obligation
We welcome your questions on the new standard. To learn more about the services available to help you comply, please call John Troyer, CPA, Audit and Accounting Partner at 216-831-7171 or by email here.
