The deadline for implementing new revenue recognition rules is fast approaching. Whether you would like to automate existing practices or meet compliance requirements of the new standards, QAD has a solution to help.
Revenue Recognition Compliance — Are You Affected?
Requirements for revenue recognition arise due to the timing of control of a good or service passing to a customer. With the advent of ASC 606 / IFRS 15 ‘Revenue from Contracts with Customers,’ the new rules can create more instances when decoupling of revenue from invoicing are required due to revised interpretations of what constitutes a sale.
The deadlines for ASC 606 and IFRS 15 are December 15, 2017 and January 1, 2018 respectively with many of you planning for implementation and discussions with auditors completed. QAD offers an automated solution for existing and new revenue recognition requirements to reduce the amount of manual work required to control revenue recognition in your financial accounts. The solution also assists with meeting advanced requirements set out in the new accounting guidelines.
QAD Revenue Recognition — Standard and Advanced Solutions
QAD Revenue Recognition automates many of the standard revenue recognition practices otherwise conducted manually by your finance department. The solution creates revenue contracts automatically and adds performance obligations linked to sale of a good or service. A revenue recognition rule is assigned which defines how and when revenue will be recorded, the timing of control passing is the deciding factor. Recognition patterns relevant to the manufacturing industry are included as standard within the solution.
Advanced functionality arising from requirements of ASC 606 / IFRS 15 allows creation of an allocated transaction price to equally assign a discount across all items in a contract. The solution also offers the ability to use estimated prices or quantities to comply with a specific requirement in ASC 606 / IFRS 15 to account for uncertainties upfront in a contract. New reporting requirements are also arising and the solution offers the ability to meet many of these needs.
Revenue Recognition at Explore 2017
In case you missed it, I presented on this topic at Explore 2017, view the presentation here. I’m interested in hearing what you think or answering any questions you have, so please leave a comment and we can discuss.