You can see all upcoming similar training events here – including other Revenue Recognition Accounting Conferences: Upcoming Training Conferences
Discussion Leader Info:
Pavel Katsiak presented Transition Issues: Systems and Processes on June 2, 2016 at the Revenue Recognition Accounting Conference in Philadelphia
. Pavel Katsiak is a Director at PWC and located in Washington DC.
-Pavel has served PwC audit and non audit clients for over 10 years.
-Pavel specializes in helping clients evaluate the accounting and reporting implications of the new revenue recognition standard.
-His combination of audit background and understanding of technical requirements of the new standard brings a practical perspective to the new revenue recognition implementation.
-Pavel’s clients include companies in industrial products, retail and consumer, technology, entertainment and media and services industries.
Katsiak began his presentation with an explanation that the effects of transition issues extend beyond accounting and continued by discussing an approach to implementation in three phases as listed below.
- Impact Assessment: Assess impact and determine strategy.
- Conversion: Establish policy and prepare initial financial results.
- Embedding: Embed as the primary revenue standard.
The speaker displayed implementation challenges including
- Centralized or dispersed business units
- Cross-functional communication and education
- Diversity of terms and conditions
- Tax implications
The speaker provided data supporting that in the Revenue Recognition Survey of 2015, 30% of respondents said their systems are centralized in one location; 21% said systems are somewhat centralized in a few locations. Of respondents who answered the question, 77% said they expect to make some to significant changes to IT or ERP systems. Furthermore, 84% believe implementing a parallel reporting system will take at least 6 months 59% expect they need a parallel reporting system and 87% of respondents anticipate some change in their internal controls 55% do not expect to make significant changes to their business models.
He discussed some changes that would need to be made as a result of the Revenue Recognition System such as
-New data may be needed from:
Ordering systems, Quoting systems, Contracting systems, Billing and invoicing systems, Cash and treasury processes, Licensing operations, and CRM.
Katsiak’s presentation displayed a list of expected master and transition data sets that will be impacted by topic 606 such as
- Volume licensing offer
- Contract (MPSA, PAR agreement)
- GL posting for revenue adjustments
The speaker spoke on the expected functionality of revenue automation capabilities for Topic 606. The expected functionalities include
- Analysis of historical sales data to determine SSP (stand alone selling price)
- Link related transactions into single contract
- Break out of performance obligations
- Booking of contract asset
- Relative allocation method
- Accounting for contract modifications
- Ability to “turn off” contingent revenue limitation
- Dual reporting
- Reporting based on adjusted revenue
Katsiak concluded his presentation with Build vs. Buy considerations of the Revenue System as listed below.
-In house experience on systems, data, revenue
Transactions and expected results
-Requires in-house specialized revenue accounting
and technical expertise and skillsets to build a
scalable system and continually update to adapt to
changes in a timely manner
-Consider time required to build.
-Solution providers will need to learn client’s systems,
data and requirements, and may not gain full knowledge
-Experienced solution providers are subject matter
experts in technical revenue accounting and
related systems. They are expected to continue
investing in their solutions to improve.
-Consider availability and long term viability of
vendor solutions and their resources to implement
From Dec 3-4 conference at Hyatt Santa Clara
Presentation led by Emily Liu and Alisher Zokhidov from PwC
See upcoming Revenue Recognition training events and other CPE conferences from ACS here: Upcoming Events
The training session carried two objectives as the opening morning of the two-day conference on revenue recognition accounting:
1. Why the new standard was issued and why it is important
2. Observations of the impacts of the new standard and how it departs from current GAAP.
Where things begin to increase in complexity are other considerations including Principal vs. Agent Assessment, contract costs (incremental costs of obtaing a contract, costs to fulfil a contract, amortization, impairment), method of adoption (retrospective or practical expedient) and prospective disclosures.
More guidance will likely be added during the transition period and companies will need to continue to monitor the ongoing evolution.
The second half of the PwC presentation on the new revenue recognition standard focused on key areas and illustrative examples.
The topics included examples on:
identifying performance conditions
time value of money
performance obligations over time
elimination of VSOE requirement for software transactions
The new Revenue Recognition Standard from the FASB/IASB is rumored to be finalized in the next month. Experts from the Big 4 and industry are developing plans to prepare for the changes.
ACS is hosting (2) two-day conferences to get attendees from industry up to speed on what the changes will mean for their organizations and industries.
The conferences focus on the new accounting standard and the practical differences from current GAAP. We’ll also have an industry panel discuss how they are planning to handle the changes and convey the changes throughout their organization as they prepare to adopt.
The SEC will also weigh in on rev rec related issues, we’ll cover Software as a Service (SAAS) accounting and case studies to further illustrate how the new standard will look in practice.
Pricing is $795 if you register well in advance – 45 days early.
Locations are Boston Hyatt Cambridge on September 19-20 and Santa Clara/San Jose, CA on December 3-4: http://www.acslive.com/events/revenue_2013.html
This year Deloitte speakers will again address the latest developments from the FASB & SEC including the exposure draft – scheduled to go final in May or June.
Here is a link to conference details: http://www.acslive.com/events/revenue_2013.html
PwC will follow up with a practical discussion study based on real world applications and how the FASB project differs from existing revenue recognition GAAP principles in relation to collectibility, contingent revenue, sales to distributors, performance obligations over time, elimination of VSOE requirement for software transactions, use of the residual approach, term licenses, time value of money and disclosure implications.
E&Y will cover fraud issues relating to revenue recognition.
Industry panelists will share their own experiences and related obstacles.
Last month at the Revenue Recognition Accounting Conference at the Hyatt Santa Clara, Protiviti addressed the issue of how to adopt the potential changes of the FASB Revenue Recognition Project.
In a presentation titled, “Beyond the numbers – Lessons Learned/Best Practices” the speakers illustrated the far-reaching implications of the changes to the standard – including IT, HR, Treasury, Sales, Marketing, Legal, Operations…
Protiviti Managing Director, Steve Hobbs, led the discussion by revisiting the adoption of IFRS standards in Europe. Steve examined the lessons learned and showed the competing priorities at play as well as the resource constraints that accounting exec faced.
The presentation continued through an overview of the 6 elements of infrastructure and the capability maturity model frameworks.
Accounting Conferences and Seminars will offer multiple revenue recognition 2-day CPE conferences in 2013. Click this link to see the 4 events scheduled in San Jose, Chicago and Boston: http://www.acslive.com/events/revenue_2013.html