The newly amended rules issued by the Financial Accounting Standards Board (FASB) for revenue standard ASC 606: Revenue from Contract with Customers, significantly impacted the revenue recognition practices for most industries. This amendment will replace ASC 605: Revenue Recognition and provides industry specific guidance. The implementation of ASC 606 has both, financial as well as operational reporting impacts for all entities executing contracts with their customers.
The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) (collectively, the Boards) respectively have issued largely converged new revenue standards: IFRS 15 Revenue from Contracts with Customers and Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. These new revenue standards supersede virtually all legacy revenue recognition requirements in IFRS and US GAAP, respectively. ASC 606 affects all entities that have adopted GAAP in the United States and have entered into contracts with customers to transfer good, services and non-financial assets. Revenues from Leases, Loans, Investments, Insurance Contracts and Certain non-monetary exchanges are not affected by ASC 606.
The Revised Effective Dates for the Implementation of New Guidance are:
- Public Entities - For annual reporting periods beginning on or after December 15, 2017, and related interim periods.
- Nonpublic/ Private Entities - For annual reporting periods beginning on or after December 15, 2018, and related interim periods beginning after December 15, 2019.
Under the revised ASC 606 standards, the new revenue standard has introduced a five-step model to recognize revenue. Both public and private companies need to re-evaluate their existing company contracts based on this model. It will help them to identify lost revenue and record it correctly in the company financials.
It Will Help Answer Two Very Important Questions:
- When to recognize revenue?
- How much to recognize as revenue?
Moving away from the legacy reward-based revenue recognition model to the new control-based standards, companies also require training and educating users about the changes they can expect in company’s financial statement.
Start by downloading this roadmap to ensure your company understands the changes to GAAP and determine how you will adopt the new guidance.
INTRODUCING AN AUTOMATED REVENUE MANAGEMENT SYSTEM
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and compliant.
Astute Ayara is an automated revenue management tool that flips the revenue management paradigm from a reactive end of the cycle recognition tool to a proactive revenue intelligence and management solution plugged into every stage of the quote-to-cash cycle – from quote to order to billing to revenue recognition, reporting and disclosure as per ASC 606/IFRS 15 accounting standards.
Astute Ayara represents a new class of finance automation tools that leverages microservices’ architectures and AI capabilities to enable proactive revenue intelligence and advanced analytics. This cloud-based solution provides native interfaces to all leading - CPQ, ERP and billing systems.
BENEFITS OF ASTUTE AYARA
- Reduce manual efforts of the revenue team by 70%.
- Curtail closing cycle time from multiple weeks to 2-4 days.
- Empower revenue to be a strategic business partner during the sales cycle while being compliant with ASC 606/IFRS 15 standards.
- Proactively optimize top-line revenue growth and margins during the sales process.
- Innovate & scale rapidly ahead of the market for business changes.
- Plug and play, fully wired integrations (with Salesforce and Conga + Apttus) for faster implementation & minimal data integration issues
- End-to-end automation of revenue management minimizing business continuity risks.
- Shift focus from post-sale to pre-sale hassle-free.
- End to end revenue management across quote to cash.
- Comprehensive rules-based engine to scale revenue processes.
- Reporting and forecasting powered by AI/ML.
- Robust & flexible business rules; quicker issue resolution.
Their excellent Technical Accounting and Audit knowledge helped us clean up some of the major areas of financial statements and assisted us in getting prepared for the audit.