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New Survey Reveals Companies Remain Unprepared for Upcoming Changes to Accounting StandardsSAN JOSE, Calif., Nov. 15, 2016 /PRNewswire/ -- A new survey of top finance executives at U.S.-based companies released today by Intacct, the customer satisfaction leader in cloud ERP software, reveals that finance departments are behind in preparing to transition to new ASC 606 revenue recognition guidelines. Countless headaches lie ahead for companies—from understanding how the new guidelines will impact existing contracts to adjusting the way revenue is recognized when customers renew or upgrade contracts. The Intacct ASC 606 Readiness Study found that 40 percent of finance professionals say that preparing for and implementing the new accounting standards will be a painful experience. And that pain is palpable enough to executives that 40 percent would rather stand in line at the DMV, 36 percent would rather sit in two hours of traffic, and 30 percent would rather burn the roof of their mouths with pizza than implement these standards. The ASC 606 guidelines issued by the Financial Accounting Standards Board (FASB) will eliminate the transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition. Under the new standard, revenue should now be recognized when control of the contracted goods or services are transferred to the customer, and at a level that is commensurate with what has been delivered by that point. According to the American Institute of Certified Public Accountants (AICPA), the new standard has the potential to affect every entity's day-to-day accounting and, possibly, the way business is executed through contracts with customers. The new accounting standard goes into effect starting at the end of 2017, but the influence of the new guidelines will impact companies much earlier, as any customer contract that extends beyond the start date will be affected. Furthermore, impacted companies will need to recast prior-period financial statements using the new guidelines in advance of the start date in order to provide proper comparative and future guidance to investors. Familiarity with the Guidelines "These new accounting guidelines will require many companies to rethink the way they do business—and that planning needs to happen right away," said Robert Reid, CEO of Intacct. "Unfortunately, mot finance teams are so overwhelmed by the here and now; they don't even want to start thinking about ASC 606. But finance departments need to take action today. The truth is that the current accounting systems at most companies simply can't handle these new revenue-recognition guidelines." Impact on Existing Accounting Software Still, many finance executives seem to be of two minds about the accounting change. The study found that 53 percent believe that implementing new software or updating existing software will be a pain point for their organization. Yet only 18% of respondents are concerned about their company's ability to handle the new revenue recognition guidelines included in ASC 606. Companies with even moderately complex customer contracts are going to find that the new rules will have extensive impacts best dealt with by software designed specifically to handle the new requirements. While the changes required by ASC 606 will be felt across the organization, it is clear that finance and IT departments will bear the heaviest burden. Existing financial systems will need to be updated, while finance teams must overhaul existing processes and systems to ensure compliance. Feeling the Pain
For additional resources and to learn more about how to prepare for transitioning to ASC 606, please visit www.intacct.com/asc606-ifrs15. About the ASC 606 Readiness Survey About Intacct Intacct is headquartered in San Jose, California. For more information, please visit www.intacct.com or call 877-437-7765. Connect with Intacct on LinkedIn, Facebook, Twitter, Instagram, Google+, and YouTube. Intacct and the Intacct logo are trademarks of Intacct Corporation. All other company and product names mentioned herein may be trademarks of their respective owners. Logo - http://photos.prnewswire.com/prnh/20120123/SF39551LOGO
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