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Are you ready for rev rec? Companies under the gun with new standard

RFP
Between April 18 and June 13, 2017, Grant Thornton presented a five-part webcast series on the pending ASC 606 revenue recognition standard. Participant poll results reveal that many organizations are struggling with the complexity of the new standard and are not yet prepared to implement it, even though it goes into effect for public business entities for fiscal years beginning after Dec. 15, 2017.

In April, over 80% of respondents reported that they were still in the planning or assessment phase with regard to implementing.

At which stage in the process do you consider yourself? Plan phase

In April and May respondents were also still evaluating and realizing the complexity of the new guidance.

Still Determining, Complexity of guidance

Respondents were struggling most with identifying performance obligations and allocating the transaction price to those obligations.

Identifying performance obligations in the contract

By the end of May the needle had not moved much. Most respondents were still evaluating the impact.

Implimenting the new standards

Moral of the story: Companies have been late to recognize the complexity of the new standards and to begin work to assess the impact and implement them. There is a lesson here for other standards looming on the horizon, i.e., lease accounting. Get started sooner rather than later.

*Polling results rounded up; results from 400 or more votes.