Free Webinar: Revenue Recognition - The New Standard and What it Means for Government Contractors

Across industries today there is wide-ranging disparity in how revenue recognition guidance is applied. This is often true even within specific industries. In an attempt to reduce the inconsistencies in practice and the complexity inherent in current revenue recognition guidance, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) issued their converged standard on revenue recognition in May 2014. This new guidance is meant to provide a comprehensive, industry-neutral revenue recognition model.

RyanSharkey is pleased to present an upcoming webinar, Revenue Recognition - The New Standard and What it Means for Government Contractors, intended for professionals in the areas of: 

  • Accounting or Finance 
  • Compliance, Internal Audit, Internal Controls
  • Program or Contract Management 
  • IT Professionals

Click here for more information and to register.

The new revenue recognition standard eliminates the transaction and industry-specific revenue recognition guidance under current GAAP and replaces it with a principle-based approach for determining revenue recognition. The model in the new standard is a five-step model that results in an entity recording 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. Revenue is recognized based on the satisfaction of performance obligations, which occurs when control of a good or service transfers to a customer.

Just five steps – sounds easy doesn’t it? As is so often the case the devil is in the details, which is no exception here. Application of the model to a company’s current revenue streams requires a thorough understanding of not only the new model, but also of new terms and concepts. This can (and likely will), result in significant changes to how much and when companies recognize revenue. Some of the issues expected to specifically affect government contracting firms are as follows:

  • Identifying the unit(s) of account – contracts vs. performance obligations
  • Variable consideration – accounting for award/incentive fees and claims
  • Satisfaction of a performance obligation over time – reassessing if percentage of completion is still effective
  • Contract modifications – changes to the current accounting practices
  • Recognition of contract assets and liabilities – changes to how unbilled receivables and deferred revenue are accounted for

What you will learn

You will come away with an understanding of the model set out under the new revenue recognition standard and challenges facing the government contracting industry as a result of its issuance. Specifically related to the government contracting industry. You will gain insights on where to focus as you evaluate current financial reporting processes for compliance with the new standard.

Not sure if you should attend?

The new standard is effective in 2018 for public companies and in 2019 for private companies. Given the scope of the change, it is important that all accounting and finance personnel understand how the new standard will affect their industry so that preparations can be made in advance of the effective date. As a result of changes made, the compliance and information systems functions at companies will likely also be affected. Compliance professionals including those in charge of contracts administration, internal controls, internal audit, etc. should be aware of changes affecting the respective roles. IT professionals will need to understand how changes resulting from the new standard will affect a company’s process for collecting and processing financial and other information.

Click here for more information and to register.

For more information on government contracting, please contact Ed Ryan, CPA at 703.652.1124 or please feel free to leave us a message below.

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Material discussed in this article is meant to provide general information and should not be acted on without professional advice tailored to your firm’s individual needs.

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