Standards Implementation - Revenue Recognition & Leasing

blum has the resources to navigate the broad implications of how new standards may affect various aspects of your organization.

Contact Us

blum has the resources to navigate the broad implications of how new standards may affect various aspects of your organization.

Revenue Recognition

The IASB and the FASB have jointly developed new revenue standards—IFRS 15/ASC 606, Revenue from Contracts with Customers. The new revenue recognition standard will significantly affect the revenue recognition practices of virtually every company in every industry, and requires the application of a five-step model:

  1. Identify the contract(s) with a customer
  2. Identify the performance obligations in the contract
  3. Determine the transaction price
  4. Allocate the transaction value to performance obligations
  5. Recognize revenue when the vendor satisfies its performance obligations

How blum can help

blum has the resources to navigate the broad implications of the standard that may affect various aspects of your organization—including business processes, financial statements, and internal controls over financial reporting—anticipating that the heaviest impacts will be on systems, processes and reporting. We can help you coordinate the collaborative efforts of multiple departments within your company by developing a roadmap to implementation, making sure you’re comfortable making the necessary valuation estimates as you make the transition to the new standard.

Leasing Standards

The FASB and IASB, in a continuous effort to bring off-balance sheet items onto the balance sheet, have also developed new leasing standards. The new leasing standards are going to significantly change the look of the balance sheet for companies with significant leases by moving all lease agreements (other than leases less than 12 months) onto the balance sheet. A lease will be considered a right-of-use asset and the future payment stream will be recorded as a lease liability.

How blum can help

Compliance with this new guidance is going to create a substantial burden for many companies. Gathering documents, understanding the guidance, and accumulating the necessary data to implement the standard effectively can take a substantial amount of time and resources. blum has assembled a dedicated team to understand and implement the new standard for our clients. This team is well versed in ASC 842, and is ready to help navigate through implementation. We have spent the up-front time vetting out the most effective and efficient way for our clients to calculate their assets and liabilities. Companies also need to understand the implications this new guidance will have on their financial statements, specifically how this will affect their debt covenant ratios.

Continue the Conversation with Our Team
Get in touch with us.

Contact Us

Related Insights

View More Insights