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ASC 606 and the impact on your business
The ASC 606 revenue recognition standard represents the most widespread change to revenue recognition rules in recent years. Effective Dec. 15th 2017 (nonpublic companies have an additional year), the new regulation was created to replace the industry-specific guidelines with a single standard across all industries. The implementation of new comprehensive revenue recognition guidance brings monumental change to how companies account for revenue and disclose revenue related information. The core principle underlying the guidance in ASC 606, included in ASC 606-10-10-2, states “recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” Below are the 5 steps of contract creation within the guidelines (with certain exceptions) of ASC 606.   1. Identify the contract(s) with a customer. A contract in the ASC 606 guidelines applies to […]
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