ASC 606 Webinar - This webinar on ASC 606 covered actionable guidance for you to ensure that your systems and processes are opportunity ready. Know more https://youtu.be/hHz6fQHxnL4 http://www.jadeglobal.com/webinars/ASC-606

1. ASC-606
New Revenue Recognition Rules
Impact the entire company
This is BIG!!! Do you know why?!

2. About Jade
Pune
San Jose
San Diego
Noida
Atlanta
Hyderabad
Reading
10 Offices
Worldwide
5 Global
Delivery Centers
Services High-Tech Manufacturing Energy Social Media & Entertainment
Boston
Los Angeles
Philadelphia

3. ASC-606 Caveats

4. Agenda
Introductions
ASC-606 Caveats
It is all about Revenue
New Opportunities
Taking Charge
Automation to assist in transition
Summary

5. ASC-606 Items to Call Out
 May 28, 2014, FASB and IASB issued, ASC 606 and IFRS 15
 Public companies - FY/CY 2018
 Non-public companies - FY/CY 2019
 Entities may elect either of two transition options:
 Full Retrospective Method
 Modified Retrospective Method
 ASC-606 Greatly Expands the Scope of Disclosures
 Contractual Cost Tracking/Matching:

6. ASC-606: Revenue is King
 ASC-606 will affect all companies to some degree
 Revenue Recognition is a key metric
 Revenue is the bases for many business decisions

7. Areas of Changes in ASC-606
 Elimination of software
guidance
 No VSOE Limitation
 Residual Approach
 Contingencies
 Roadmaps
 Ratable revenue may
change
 Vendor protection clauses
 Time value of money
 Extended payment terms
 Certain Subscriptions
 Cash Cap guidance
 Funded R&D
arrangements
 Distributor revenues
 Contract modifications
 Bill and hold
arrangements
 Term licenses
 Sales Commissions
 Other contract costs
 Volume Discounts
 Extended warranties
 Judgement & Estimates

8. ASC-606 Beyond Accounting Change
 ASC-606’s pervasive changes will be across the company:
 Key Financial Metrics
 Management/ Sales Compensation
 Debt Covenants
 Tax Payments
 Investor Relations
 IT Systems/ Processes/ Controls

9. ASC-606 Creates Opportunities
 Business models, now have a fresh look
 Business Practices
 Contract Terms
 Go-to-Market Strategies
 Sales Compensation
 Tax Matters

10. ASC-606 If You Have Not Started, You Are Late
 Per PWC
 Public Companies - 8%, not started, 75% assessing, 8% implementing
 Private Companies – 47% not started, 45% assessing, 7% implementing
 http://www.pwc.com/us/en/audit-assurance-services/accounting-
advisory/revenue-recognition-survey.html
 For Full Retrospective method, the transition has begun
 For Modified Retrospective method, data gathering has begun
 Transition to ASC-606 timeline: 6 to 9 months, depending
 3 to 6 months to assess and implement
 3 months to run in parallel

11. ASC-606 Here is What You Can Do!!
 Starting today, make ASC-606 Top Priority,
TAKE CHARGE!!
 Practically/Actively what to do: “12 steps program”
 “Accept the Old Methods are not Compliant”
 Get Priority from the Very Top
 Select a Cross-Functional Team
 Educate the Team
 Team Assesses the Situation/Sets Roadmap
 Design & Implement: new Policies, Process and Systems

12. Next Steps
 Don’t underestimate the potential impact or level of effort required
 Complete your assessment soon
 Consider the pros and cons of each adoption method and plan for
SAB 74 disclosures
 Develop a detailed plan for implementation

13. Addressing These Challenges

14. Addressing These Challenges

15. Tools Focus in Automation
 There are multiple automation tools in the market and these are
 Stand alone tools that consume data from your transactional systems
 Build on rules that you configure to
 Manage revenue contracts (RC)
 Identify configurable performance obligations (PoB)
 Determine in arriving at transaction price (TP)
 Allocate transaction price to separate performance obligations
 Manage events or triggers to release revenue
 Manage operational, accounting and disclosure reporting

16.  There are multiple automation tools in the market
 from Leeyo
 Revenue Management Cloud Service (RMCS) from Oracle
 from RevStream Inc.
 from RevSym
 Advanced Revenue Management from NetSuite
 Excel !!!
Revenue
Management Cloud
Tools in the Market

17. Transaction Lifecycle In Revpro – ASC 606
Transaction
Grouping
Assign POB
Templates
Calculate
Variable
Consideration SSP
Assignment
Create/Modify
Revenue
Contract
Revenue
Release
Accounting Reporting
Calculate Other Costs
Forecasting
Bundle
Explosion
No
Bundle Config
Exists? Yes
Revenue
Allocation
Contracts Orders Projects Billing Revenue Events
Identify Customer
Contract
(Step 1)
Identify
Performance
Obligations
(Step 2)
Determine
Transaction
Price (Step 3)
Allocate
Transaction
Price (Step 4)
Recognize
Revenue
(Step 5)
Post and
Report
GAAP Guidance

18. RevPro - Main Menu

19. RevPro - Main Menu

20. RMCS - Revenue Management Cloud Service

21. RMCS – Co-existence

22. RMCS – Functionality and Configurations
Source system Product Sale Service Sale Define Common Revenue Configuration
Contract
Idenfication in
FRM
Grouping
identifier
So#/PO#
Specific Time
period
Manage Contract Identification Rules
Performance
Obligations
Identification
Explicit Goods
/ Services/
Combo
Implied based
on template.
Manage POB Idenfication Rules,POB Templates
Performance
Obligations
Satisfaction
Point in time
Point over
time
Group by Legal Entity &
Currency
Satisfied using
Events.
Manage Performance Satisfaction Plans
Performance Obligation
Measurement
Quantity
based
Percentage
Based
Measure
Period
satisfied
Satisfaction Measurement Model in Implied Template
Standalone
Selling Price
(SSP)
Create SSP Manage SSP Define Observed and Estimated Standalone Selling Prices

23. RMCS – Main Menu

24. Challenges with Revenue Recognition using Excel
 Pros
 Spreadsheets are blank slates
 Easy to use
 Cons
 Not secure
 Heavily dependent on the user
 Manual and error prone
 Limited in functionality

25. Summary
 Critical considerations towards ASC-606
 Are you currently working with spreadsheets?
 What option is best for you to comply with the new guidance?
 Have you analyzed your business processes?
 Review your ERP/systems footprint
 Analyze your current transactional sources and processes
 Are you clear on the data sources to support compliance with the new
guidance
 Trusted tools & methodologies
 Automate your revenue recognition data collection activity
 Process revenue recognition tasks with rules based engine

26. ASC-606 Jade Global
 “We are Ready to Help Today!” Help You TAKE CHARGE!!
 Jade Global
 Oracle Platinum Cloud Standard Partner
 13 years in business
 200+ Customers with 800+ technology projects
 600+ Employees
 We do Services:
 Advisory Implementation/ Upgrades
 Managed Services
 Mobile & Custom Development
 Integration
 Analytics and BI

27. Contact us
Connect With Us
Visit us at www.jadeglobal.com
Email us at marketing@jadeglobal.com
Call us at 1-877-JADE4IT