Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers, significantly impacts business operations for construction companies.
The standard necessitates that your organization evaluate contracts in a new way, requiring changes to accounting systems and process and related internal controls. It may cause your organization to consider changes to standard contract terms and the way in which you negotiate and draft your contracts. It could also impact other areas, such as compensation programs and lending agreements.
The new standard will require that you collect and evaluate all your customer contracts and document your decision making process for the accounting of revenue from those contracts. Though the effective date for compliance may seem distant, business systems, processes and controls should be implemented on Jan. 1, 2018 to provide the necessary information for reporting and disclosure for private companies.
While the issues associated with the assessment and implementation of the standard will vary for every company, Baker Tilly has developed a six-step methodology to help you through the complex process of assessing impact, developing a plan, and implementing that plan across your organization.
Watch this webinar to learn the steps Baker Tilly believes a construction company should take to achieve compliance and how timely adoption will benefit a contractor.
- Understand the standard’s impact on business operations
- Learn methodology to navigate assessment and implementation
- Understand next steps in developing a transition plan
For more information on this topic, or to learn how Baker Tilly construction specialists can help, contact our team.