ASC 606 Compliance

ASC 606: Revenue from Contracts with Customers is the new revenue standard, developed jointly by the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (ISAB), that affects all businesses entering into contracts with customers for the transfer of goods or services. This pertains to public, private, and non-profit entities. Public companies should already be compliant, based on the 2018 deadline. The deadline for non-public companies to become compliant is December 31, 2019.

The ASC 606 and IFRS 15 accounting standards were developed to achieve international alignment on how companies recognize revenue from contracts and customers. The overall purpose of this rule is to eliminate variations in the way businesses across multiple industries manage accounting over similar transactions.

Meeting the new compliance standards can take time, but it’s well worth the effort. Aside from the legal responsibility, ASC 606 compliance will help better organize your business’s revenue management, providing an opportunity for improvement and growth.