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Both public and privately held companies should be ASC 606 or IFRS 15 compliant.
Is yours?
Choosing a cloud application to help with revenue recognition allows organizations to easily evolve to meet customer demands in the new services economy.
Explore the benefits of a revenue recognition solution native to Salesforce:
- Powerful, flexible data models
- Seamless integration with other applications
- Configurable templates and rules
- Forecasting capabilities
Don’t get bogged down by compliance standards
Transform the process into an opportunity for strategic wins across your business.
What is the Impact of ASC 606?
The rule, “Revenue from Contracts with Customers” standardizes and simplifies how companies record revenue in customer contracts. It covers how businesses report the nature, amount, and timing regarding contracts with customers.
The impact might not be as significant for companies, such as retailers, that sell products and receive revenue at one time. But for companies that sell recurring services like subscriptions or licenses, the rule may improve the results.
Under the previous law, if a company, for example, sold a 12-month software product license, it could apply only six months of revenue to its books. It would not be able to count the next six months of revenue until the following year. But under ASC 606 it can count all the revenue at once.
Implementing ASC 606 also has broad ramifications. Meeting the standard will impact not just your accounting and financial departments, but will impact your IT systems, HR policies, and more. It’s these broader implications and unknowns that have many companies concerned.