Welcome to Tensoft’s- Implementing ASC 606, the new revenue recognition standard and some of the changes to SaaS and Subscription based revenue recognition models for technology companies. My name is Jeffrey Werner, I am with the Werner Consulting Group, the revenue recognition consulting practice.
Here’s some of the potential changes that SaaS and subscription services companies need to consider when they implement ASC 606, the new revenue recognition standard. You should be aware of these changes and take some time to understand and explore them so that you can make sure that your company and your business model comply with the new standard and that the expected changes of the adoption of the new standard are the actual changes and the impacts to your company. We will look at each one of these individually, but we want to list out these 5 potential areas of changes that you should explore and make sure you understand the impact to your company.
The first one is that if you have a SaaS or subscription arrangement in your offering to your customers, there may be more performance obligations under the new standard then under existing ASC 605, the current revenue recognition model. And in addition, those different performance obligations might have different timing. Some of them might have shorter time spans then the subscription arrangements revenue recognition. Some of them may have point in time revenue recognition rather than overtime revenue recognition. The second area would be usage based pricing…. For the full presentation, click here.
Interested in more insight about revenue recognition? Please search for ‘revenue recognition’ on this blog page, and visit the Resources page here for recorded revenue recognition training webcasts. And, be sure to read about Tensoft’s revenue recognition solutions if you’re looking for additional help.
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