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- to imagine again or anew; especially : to form a new conception of
- to make as if for the first time something already invented
- to remake or redo completely
- to bring into use again
ASC 606 Revenue Recognition
Non-public Entities and ASC 606 Revenue Recognition?
With the upcoming standard change (ASC 606) deadline for non-public companies approaching in January 2019 for non-public entities, have you made the necessary changes within JDE to address the new requirements? The new Revenue Recognition enhancement is available as of JD Edwards EnterpriseOne release 9.1 and delivered via ESU. There is no revenue recognition solution available for releases lower than EnterpriseOne 9.1.
In May 2014, the FASB and the IASB issued their converged standard on revenue recognition. On March 27, 2017, the IRS issued Notice 2017-17, proposing automatic consent procedures for companies to change their revenue recognition methods related to ASC (Accounting Standard Codification) 606 adoption (also known as IFRS 15) with the goal to increase the consistency of financial reporting throughout all industries.
The revenue recognition standard affects all entities—public, private, and not-for-profit—that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example: leases and insurance contracts). Financial instruments, guarantees (other than product or service warranties), and nonmonetary exchanges between entities in the same line of business to facilitate sales to customers or potential customers are also scoped out.
The New Revenue Recognition Model
The core principle of the new standard is recognizing revenue in a way that depicts the transfer of contracted goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. Revenue is recognized when a company satisfies a performance obligation by transferring a promised good or service to a customer (which is when the customer obtains control of that good or service).
This revenue recognition model is based on a control approach, which differs from the risks and rewards approach applied under current US GAAP. The new standard introduces a five-step model to address the book impact of revenue recognition.
If you haven’t begun the transition to the new revenue recognition standards or explored the potential effect these changes can have on your financial statements, please reach out to us so we can assist you.
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Our goal is to be your trusted partner providing the expertise a company doesn't necessarily require on staff on a regular basis. Whether your requirement is a small development project, a technical or functional upgrade, a lift and move to the cloud for JDE or the implementation of a new ERP system, RRE Technology is available to advise you of all your options and then assist in execution of the solution.
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