CHICAGO (May 17, 2017) – A poll conducted by Baker Tilly Virchow Krause, LLP (Baker Tilly) found more than 60 percent of the insurance organization respondents have revenue streams subject to Accounting Standards Codification (ASC) 606, revenue from contracts with customers, yet more than half are not even somewhat prepared to implement the new standard.
“Many insurers initially thought they would not be subject to the new ASC 606 standard because insurance contracts accounted for under ASC 944 were out of scope,” Jason Jacobs, CPA, partner with Baker Tilly’s financial services practice group, said. “However, it is important to understand that insurance organizations are still subject to the standard for other revenue streams that do fall under ASC 606.”
“With the first effective date rapidly approaching, insurers should carefully review how their organizations are affected by ASC 606,” Jonathan Zeigler, CPA, partner with Baker Tilly’s insurance industry practice, said. “Implementation may affect a variety of business functions, so internal resource constraints must be considered when looking to assess and implement updated internal controls and processes.”
Baker Tilly recently held an educational webinar, “ASC 606 for insurance organizations: Who is affected and what are the impacts,” to assist insurance organizations in preparing for implementation of the new revenue recognition standard.
The webinar presenters discussed:
- The main elements of ASC 606
- Revenue streams that may be impacted under ASC 606
- The extent to which organizations may be affected (time, effort, resources, internal controls, processes etc.) and the timeline to implement changes
Presentation slides and a recording of the webinar are available at bakertilly.com/insights/asc-606-for-insurance-organizations-who-is-affected-and-what-are-the-impact.
About Baker Tilly Virchow Krause, LLP (bakertilly.com)
Baker Tilly Virchow Krause, LLP (Baker Tilly) is a nationally recognized, full-service accounting and advisory firm whose specialized professionals connect with clients and their businesses through refreshing candor and clear industry insight. With approximately 2,700 employees across the United States, Baker Tilly is ranked as one of the 15 largest accounting and advisory firms in the country. Headquartered in Chicago, Baker Tilly is an independent member of Baker Tilly International, a worldwide network of independent accounting and business advisory firms in 147 territories, with 33,600 professionals. The combined worldwide revenue of independent member firms is $3.4 billion.
1) 61.4 percent of respondents answered “Yes” to a poll question during the ASC 606 for insurance organizations: Who is affected and what are the impacts webinar held on May 9, 2017.
2) 55 percent of respondents answered “1 – not at all prepared” or “2” to a poll questions during the ASC 606 for insurance organizations: Who is affected and what are the impacts webinar held on May 9, 2017.