The ASC 606 transition for construction contractors


Take a closer look at how ASC 606 will affect your construction business

All companies must go through the process of applying the new standard and documenting their decision making process as well as adding significant disclosures for those decisions to their financial statements.

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In this series of insights, we illustrate the critical new concepts of each element of the standard with construction industry-specific scenarios so you can begin to assess the impact it will have on your business. 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.

The ASC 606 transition for construction contractors:

Step 1 – Identifying the contract

Collectability
Combining contracts
Contract modifications

Step 2 – Identifying the performance obligations

Promises in contracts with customers
Principal versus agent considerations

Step 3 –Determining the transaction price

Variable consideration
Noncash consideration
Significant financing component

Step 4 – Allocating the transaction price

Standalone selling price
Allocating variable consideration
Changes in the transaction price

Step 5 – Recognizing revenue


Step 6 – Disclosures

Special considerations

Tailored services to help you navigate the changes

ASC 606 significantly impacts business operations for construction companies. We have 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.

Our construction industry specialists understand the revenue streams and various standards that apply to your accounting. We understand that not every organization needs assistance in every area of implementation and can provide you the type of support your organization needs.

Connect with our ASC 606 specialists to understand the impact on your organization and the resources you will need to effectively implement the changes.


Additional ASC 606 resources