Starting in 2018 for public companies and 2019 for private companies, these guidelines from the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) will require companies to reallocate revenue with greater frequency—each time a customer contract changes—and defer expense recognition to align with the contract’s delivery.
As a result, contract add-ons and renewals must be integrated into a single contract and will trigger reallocations across both past and future periods—causing continuous revisions to revenue allocations and expense alignment.
Companies must choose one of two ways for complying with these new standards—a full retrospective or a modified retrospective approach. While each has their pros and cons, they both require organizations to account for contracts under both the old and the new guidance before and during the transition year.
The full retrospective approach
Under the full retrospective approach, companies retroactively treat all contracts as if IFRS 15 and ASC 606 were already in place, which means their prior-period financial statements would reflect the new standard. A public company with a calendar year-end would recast its 2016 and 2017 financial statements in its 2018 annual financial statements. According to PricewaterhouseCoopers, “while this transition method could be more demanding from a recordkeeping perspective, it would result in greater comparability and would likely be preferred by the analyst and investor community.”
The modified retrospective approach
Here, the new standards are applied to all new contracts started on or after the effective date. For contracts with remaining obligations, you’ll enter an adjustment to the opening balance of your retained earnings account. Prior-year financial statements will not need to be recast, which can help you come into compliance more quickly. However, you will have to keep two sets of accounting records for the year the new guidelines are adopted, so you can properly disclose line items in the financial statements as if they were prepared using the current standard.
Which approach should I choose?
There is no clear answer to that question. According to a Deloitte survey, 38 percent of companies were planning to use or had a “ preliminary leaning” toward adopting the full retrospective method, and 25 percent were for the modified retrospective approach. A full 37 percent were undecided.
Experts at Deloitte & Touche recommend that companies consult with key stakeholders and seek to understand what similar companies are doing. However, they also note that the greater the potential differences between your legacy revenue accounting and the accounting for revenue under IFRS 15/ASC 606, you should consider the full retrospective transition method.
Intacct and Arxis to the rescue
Whichever method you choose, the transition period can overwhelm your finance teams with manual processes and complicated spreadsheets. That’s where Intacct Contract and Revenue Management comes in. It completely automates dual reporting and posting with different accounting treatments for current and IFRS 15/ASC 606 guidelines, saving you hours of time and effort.
The experts at Arxis Technology can further ease the transition with professional implementation and support. The time to get started is now.
Cloud Manufacturing Software Helps Improve Time-to-Market
Time-to-Market (TTM) in manufacturing industries is a critical factor in meeting customer demands, lowering production costs and increasing profit margins. To remain competitive, manufacturers are constantly looking for ways to reduce time-to-market – this time ranges from product concept and development to getting the product sold and in the customer’s hands. Regardless of your industry, time-to-ma
How Do I Email Invoices in Sage 100? 9 Steps to Set Up Automatic Electronic Delivery in Accounts Receivable?
Sage 100 Question: Mike, how can I setup the Paperless Office Invoicing in Sage 100 for Electronic Delivery of Accounts Receivable of Invoices?
Manufacturers and distribution companies have a lot to juggle: from tracking inventory and operations to communicating with their vendors and buyers. For this reason, many supply chain companies turn to Enterprise Resource Planning (ERP) software to assist them with their day-to-day operations as well as special projects. Some of them could be making one fatal mistake without even knowing it…their ERP could be outdated causing loss in profitability.
Like a mattress, ERP begins to become outdated after about 8 years. At that point, your company has two options:
1) Upgrade your current software
2) Replace your current software
It may sound like a sales pitch, but in today's technology-driven world mechanical breakthroughs being made in 8 years that once took 20 years. Some ERP technological advancements that have happened in the past 8 years are:
- The inclusion of Warehouse Management Systems (WMS),
- API integration,
- Internet of Things (IoT),
- and, Accessibility from mobile devices.
The list of advancements could go on and on.
Maybe your company knows it’s time for an update, but the timing is off. Or, maybe they don't want to update your current software because you aren't really happy with the version you have and the idea of trying a new software seems too risky. If you really want to see how much what your company can gain from a new ERP solution then the best thing place to start is to examine the value of different ERP platforms.
A quick and easy way to look at the value of replacing your ERP software is to estimate the potential return on investment (ROI). In this article, we will be teaching you simple methods for calculating the ROI of implementing ERP.
Microsoft Dynamics 365 is the latest cloud-based ERP and CRM business management system for growing businesses to extend their investment by adding modules and business apps as they expand their operations. It’s a smooth transition getting started with Dynamics 365 for Financials with tight integration with familiar Microsoft applications such as Office 365 and the Outlook Add-In. Customers quickly start to take advantage of ordering, selling, invoicing, and reporting.
Microsoft Dynamics 365 Business Edition will have options for several modules*
- Financial Management Functionality (ERP)
- Sales/Customer Relationship Management (CRM)*available 2017
- Marketing/Customer Relationship Management (CRM)*available 2017
- Customer Service/Customer Relationship Management (CRM)*available 2017
Top 5 Reasons Sage 50 Customers Upgrade to Sage 100c
The popularity of Sage 50 with small and mid-sized businesses over the past 20+ years is mainly based on the reputation the its ease-of-use and broad and deep functionality. In the course of any growing business, there comes a point when limitations cause for an evaluation of a new system. With over 1 million customers on Sage 50, many outgrowing their system are thrilled to learn about the option to migrate to Sage 100c. Sage a strong history of a “Customers for Life” philosophy and Sage 100c is a great example how they deliver on this underlying goal. Upgrading to Sage 100c offers new levels of capability and the extended features that serve as a flexible and scalable system for growing companies.
Sage ERP consultants, resellers, ISVs and customers join ERPVAR at Sage Summit 2017!
ERPVAR is happy to attend Sage Summit 2017 today with Sage ERP consultants, resellers and customers in Atlanta, GA on May 9 to 11, 2017. This Sage Summit conference is attended by a network of hundreds of the nation’s leading Sage software resellers with expertise in technology and solutions integration for small-to-medium sized businesses. Sage certified resellers support and implement Sage 100, Sage 500 and Sage X3 software products.
Meet up with Adrian Montgomery with ERPVAR at Summit! She may be found by contacting us at 888-253-6705 or by email. Sage Summit 2017 is a great opportunity to connect with Sage employees, partners, customers, and ISVs who have integrated their ERP solutions to Sage products. Thank you for your support! We look forward to visiting with you!We are proud to highlight a few of our partners who will be at their booths.
SPECIAL SAGE PROMOTION: There is a SPECIAL SAGE PROMOTION offered by V-Technologies, American Payment Solutions and One Software Solutions. Stop by all their booths and you have a chance to WIN $1,000. Don’t miss out on visiting this fantastic team and others below.
Producing a film can seem like an endless process that can take months, if not years. If you’re an accounting professional in charge of month-end close, you may feel the same sense of never-ending work.
This is especially true if you have multiple accounts to reconcile. With many projects in the works, you may have a slow, disorganized process that consumes valuable time. And audit fees may skyrocket because of lack of documented review.
Month-end close doesn’t have to be quite so painful. FloQast, an Arxis Technology partner, offers the fastest, most accurate way to close the books. In fact, FloQast users such as GrubHub, L.A. Lakers, and UNITE HERE HEALTH, have been able to reduce their close by 30 percent after just one quarter.
Cloud Manufacturing Software – How to Apply Lean Manufacturing for Development, Engineering, Manufacturing and Aftermarket Stages
Successful manufacturing companies realize the importance of investing a portion of the R & D budget for continuous product innovation. For discrete manufacturers lean manufacturing is one innovative principle that is possible to apply to more than just product development. Lean manufacturing helps reduce costs and increase productivity with tools and processes to eliminate waste during the manufacturing process. This principle of streamlining and increasing efficiency is also the reason why manufacturers turn to cloud manufacturing software solutions.
Dynamics GP Cloud Hosting and Office 365As experienced accounting and business management systems consultants, we work with customers who are running into limitations with their outdated tools and systems that supported their initial growth. As a business grows, it becomes increasingly clear that it’s necessary to find a system that will accommodate future growth and provide the right business intelligence to make decisions with agility and insight. Microsoft Dynamics GP is a complete business management solution to help you manage your financials and operation that takes advantage of the latest innovations, from cloud computing to mobility to social connectivity– delivered without being a burden or a risk to our cash flow.
Since most businesses are used to running Microsoft Office products, the Office 365 integration with Dynamics GP cloud hosting is a stress-free solution as the everyday communication tools in Office 365 come together with your business management systems. For example, Microsoft Dynamics GP makes it easy to combine your data, find new insights, and share them with others. By combining it with Office 365, you reduce risks, increase rewards, and unlock insights to drive more informed decisions for every department. When you connect people, processes, and systems all from one place you can make smart decisions quickly and proactively.
Our Dynamics GP customers appreciate the Office 365 integration for the following reasons.