July 31 by Steve Feyer

The biggest change in accounting in many years is fast approaching. For public companies, ASC606 will take effect on December 15 this year, while private companies have another year to comply. Outside the US, most companies must comply with the very similar IFRS15 on the same schedule.

ASC606 is coming—how close to ready is your company? Take this quick quiz to find out if your company has taken the right steps to prepare.

Are you ASC606 / IFRS15 Ready?

Question 1:

My company has provided education and training so that affected departments are aware of ASC606 / IFRS15 and its impact.

A) Not yet started
B) In progress now
C) Completed

If your company isn’t talking about ASC606, now definitely is a good time to start the conversation. Read more about impacts to Finance, Legal and Sales from this new accounting rule.

Question 2:

My company has evaluated the effect on ASC606 / IFRS15 on our business and determined if it will have a material impact on the company’s profit or loss.

A) Not yet determined
B) In progress now
C) Completed

Of companies disclosing the impact of ASC606 on profit-and-loss in SEC filings, 16% expect a material impact according to research from Connor Group. Is your company one of them?

Question 3:

My company has acquired software, or modified existing software, to comply with ASC606 / IFRS15 requirements.

A) Not yet started
B) In progress now
C) Completed

Only 13% of companies were fully ready for ASC606 when polled by PwC. You can see a demo of ASC606 compliance software and learn how Quote-to-Cash technology can translate the technical requirements of accounting rules into end-to-end business processes.

Question 4:

My company has established a process to identify, evaluate and track performance obligations in contracts.

A) Not yet started
B) In progress now
C) Completed

Improved data quality and data-driven insights, such as the ability to locate performance obligations in contracts or the ability to automatically propagate contract changes to revenue recognition schedules will be critical for ASC606 compliance, yet E&Y recently found that 34% of CFOs say they are at risk of falling behind or haven’t begun revenue recognition changes yet. Even more companies are using employees and consultants to comply, at a high cost.

Question 5:

My company has defined the ways that it will change contracting, compensation, pricing and other practices to optimize our profitability and easily recognize revenue under ASC606 / IFRS15 rules.

A) Not yet started
B) In progress now
C) Completed

ASC606 will have profound long-term effects on how companies structure their revenue operations, and 61% of CFOs see it as a chance to drive business transformation. Yet 43% of CFOs are too concerned with immediate tasks to think about business effects according to E&Y. Learn more about the potential impacts of ASC606 on key business functions.

How to score:

Give yourself 3 points for every “C” answer, 2 points for every “B” answer and no points for every “A” answer.

10-15 points: Your company is well on its way to full ASC606 compliance. Congratulations!

6-9 points: Your company is making progress toward ASC606 compliance, but may be at risk of missing deadlines, spending huge sums on one-time manual effort and failing to take advantage of opportunities to automate processes to streamline compliance and reporting efforts.

0-5 points: Your company is falling behind and needs to step up its ASC606 program now. Without immediate action, your company may be subject to penalties, commercial risks, and competitive disadvantage. Contact us today to find out how Apttus can bring your company into ASC606 compliance.

Need to learn more about ASC606? Visit our solutions page!

What’s changing with ASC 606/IFRS 15 and how to automate with Apttus Intelligent Quote-to-Cash? Download this White Paper

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