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Applying new revenue guidance in IT

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The information technology (IT) industry is arguably one of the sectors most affected by the new revenue guidance, ASC 606, Revenue from Contracts with Customers. Management and audit committee members for internet, online retail and software companies need to consider a number of items as they look to apply the rules, as implementation is right around the corner – Jan. 1, 2018, for calendar-year public companies and Jan. 1, 2019, for calendar-year private companies.

  • What contract terms to watch for
  • What an auditor will look for
  • What questions to ask and how to stay on track

These points, detailed in Grant Thornton’s bulletin on implementing the guidance in the IT sector, serve as a conversation starter. Executives and the audit committee can use them to engage parties involved in the implementation process, all the while remembering that the revenue guidance is not just an accounting exercise but a cross-functional one that requires extensive coordination between tax, sales, IT and other functions.

Review our bulletin to learn what IT needs to know