ProNexus Leads New Revenue Recognition Standard Implementation
Requirement: Staff Augmentation
The client is an American technology, defense contractor and information technology services provider with over $7.4 billion in revenues. It is subject to FASB ASC 606, Revenue from Contracts with Customers, and they needed to determine if they would adopt the standard early. If they did not choose the early adoption, they would need to comply with the requirements as of their first quarter of fiscal year 2019. To make the transition and to meet reporting requirements, all material customer contracts needed to be analyzed so they could determine the impact on the amount and timing of customer revenue.
ProNexus was engaged to work with one division of the client. The client had already identified the scope of contracts that would need to be reviewed. ProNexus assigned a consultant to begin reviewing these contracts. ProNexus reviewed over 200 contracts and documented the type and amount of changes from the prior accounting standard. This involved reading each contract and all its amendments, purchase orders and other key documents. The technical accounting standard was referenced to identify contract terms to create material changes. ProNexus was able to communicate these changes to management, which allowed the client time to address changes in the technology systems, processes and controls inherent with the change in revenue recognition.
Click here to download more information on the New Revenue Recognition Standard.