You saw it, right? The audit practice alert published last week from the Public Company Accounting Oversight Board? The one guiding audit firms on how they should audit your firm’s implementation of the new revenue recognition standard?
The standard going into force in two months!
Yep, it’s real now. You can’t stall implementation and disclosure any longer.
Thankfully, Calcbench has your back. We have been following companies’ implementation of the new standard for more than a year, and we have several ways you can use our databases to see how other firms are adopting the standard, to judge your own progress.
Above all, we created a new disclosure type: “Revenue From Contracts With Customers,” to help you see what other firms have been disclosing so far. Here’s how you use it.
First, start with the Interactive Disclosure Database. Use the “Choose Companies” function in the upper left corner to create the population of companies you want to study. For our purposes today we’ll use the “Whole Universe” function. You can also read our previous post about how to create peer groups of your own.
You also need to set a disclosure period to search, using the fields on the upper right portion of your screen. In theory, you could search any period (quarterly or annual), but companies didn’t start adopting the new revenue standard until earlier this year. Our recommendation would be to start searching from Q1 2017.
Next, in the “Choose Footnote/Disclosure Type” menu, select “Revenue from Contracts With Customers.” It’s near the bottom of the many disclosure choices Calcbench offers, but it’s there. Also, under the “Full Text Search” box on the right-hand side, check that box that says, “Restrict to specified disclosure type.” (See Figure 1, below, for help.)
Then press “Go” and you get your results. You get a list of companies that are already reporting something under the new revenue standard.
You want to narrow the field even further? Easy. Just enter whatever text string you have into the Full Text Search box. For example, all companies must disclose which of two possible adoption methods they plan to use to implement ASC 606: the “modified” or “full” retrospective approaches. So you could enter “full retrospective” or “modified retrospective” into the text search box, to see which firms used the approach you’re studying.
And don’t forget to read our several reports on companies adopting the new standard: our look at companies in the software sector, and many posts archived on our blog. We’ll have more in the future, too!
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