Public companies were required to adopt the new revenue recognition standards by January 1, 2018, while private companies have an extra year (January 1, 2019) before being required to adopt. During 2017, a number of public companies elected to early-adopt Accounting Standards Codification (ASC) 606, and a few of these companies received comment letters from the Security and Exchange Commissions (SEC).
While not all of these comment letters relate specifically to companies in the construction industry, private companies beginning the implementation process can still gain valuable insight.
Below are a few topics included in the SEC comment letters and how these comments may translate to private companies implementing ASC 606:
While ASC 606 may not be effective for private companies until January 1, 2019, companies should have already begun the process of implementing the new standard. Generally, companies have underestimated the time and cost associated with evaluating and implementing ASC 606, so the sooner you can begin the process the better.