Revenue Recognition

Revenue Recognition Accounting Services

Revenue recognition standard known as ASC 606 is a model that increases financial statement comparability across companies and industries by applying a uniform framework to revenue recognition. InGame Enterprise professionals support businesses with implementation and compliance of the new standard through our comprehensive processes. ASC 606 is a five step process that applies to publicly traded and privately held business.

_{The Five-Step Approach}

1. Identify the contract with a customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations in the contract
5. Recognize revenue when or as the entity satisfies a performance obligation

We will first determine the scope of implementation, review contracts, and design impact assessment memoranda. It is crucial that members of the organization follow the standard to stay in compliance so our professionals train organization personnel, draft and implement accounting policies, procedures, and disclosures; and evaluate the overall systems and its controls implications. We  also provide support after implementation with ongoing monitoring and analysis to make sure that the company is making the most of the new standard.

_{The revenue recognition standard may apply to if you operate in a business that:}

• Contracts with multiple elements of goods and services
• Earn variable consideration
• Offer extended payment terms
• Earn revenue through collaborative arrangements
• Use the percentage of completion method
• Sell through distributors
• License intellectual property
• Offer software as a service (“SaaS”)
• Receive non-cash consideration
• Have contracts with minimum purchase commitments
• Have contracts that offer free or discounted goods or services in the future

^{The areas listed below are affected by the revenue recognition standard:}

• Financial statements
• Information systems
• Standard contracts and other sales agreements revisions
• Sales incentives and commissions
• Internal control processes
• Executive compensation arrangements
• Debt covenants
• Taxes

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