Get IFRS15, ASC606 Ready - The Easy and Quick Way

  http://www.infosysblogs.com/oracle/2017/09/get_ifrs15_asc606_ready_quickl.html

 
The accounting standard for recognizing revenue is changing.  For the new comers let me
briefly describe the change.
What's the Change?
For countries using the IFRS standards, it means they now need to account revenue as per "IFRS
15- Revenue from Contracts with Customers" instead of "IAS- 18 - Revenue" standard to
recognize the revenue.
For the US based companies needing to report under US GAAP, they now have to account
revenue as per new "ASC 606 - Revenue from Contracts with Customers" instead of the old
"ASC605 - revenue Recognition".
The old IAS 18 standards (issued by "International Accounting Standards Board (IASB)") and the
ASC 605 (issued by "Financial Accounting Standards Board (FASB)" for the US companies) where
having substantial differences. The new standards issued by the IASB, ASC i.e. IFRS15, ASC606
are now synched up.
The new standard outlines the below five logical steps for revenue recognition -

What's the big deal?

So - what the big deal? The accountants will take care - should the rest of you be worried?
Accounting changes always keep happening, so what new now?
This is a big because it impacts the most important numbers on your P&L - the top-lines and the
bottom lines and many other critical aspects like the taxes to be paid, the annual plans,
probably the commissions, bonuses to be paid as well.
This is also big because the change is complex especially if you have bundled deals (like the
telecom and hi-tech industry). Not all accounting software can do accounting as per the new
standards. Apart from the accounting systems, business processes and maybe business
contracts also might need modifications.
So, it is not just the finance guys / accountants - the board, CXO's, auditors, the Information
technology folks, the planners, the analysts, sales teams, HR compensation teams - needs to
understand the change and plan for the impacts.
Getting this wrong, has a direct impact on all key stake holders - shareholder value, employees
(bonuses, commissions), government (taxes).
By when do you need to ready?
That depends on whether you are applying IFRS or US GAAP. For most of the companies the
standard has to be adopted from the financial year starting in 2018.
  For "IFRS15" applying companies
o The financial year starting "on or after January 1, 2018"
 For "Public business entities" and "not-for-profit entities that are conduit bond obligators applying US GAAP"
-
o The financial year starting "on or after December 16, 2017"
 For the other "US GAAP" companies
o The financial year starting "on or after December 16, 2018"

Are you late in the game? Probably yes, but....

This is where Oracle - Infosys can help you.
The Oracle Revenue Management Cloud Service (RMCS) is tailor made to meet the IFRS15 /
ASC606 requirements including the transition requirements. The product has been successfully
implemented across industries and is a proven solution for IFRS15 / ASC606 needs.
The "IFRS15 / ASC 606 solution" of Infosys is a complete solution to get IFRS15 / ASC 606 ready -
quickly and perfectly. The Infosys solution encompasses program/project management, change
management, implementation of RMCS, implementation of Financial Accounting Hub Reporting
Cloud, building integration with various middleware. The Infosys solution  creates a robust
process with tight integration ensuring automated reconciliation and no revenue leakage /
discrepancies.
Considering the need to ready on time, the solution will prioritize requirements, so the MUST-
HAVE requirements are developed, tested and ready on time.
Below is the overview of the Infosys Solution

How do we make a difference? How quickly can you be ready?

Infosys has been working on numerous IFRS15 / ASC 606 implementations using Oracle RMCS.
While a typical IFRS implementation is done in 6-12 months implementation time depending on
the number of integrations, use cases, we are able to cut the implementation time by at least
25% by levering the accelerators repository comprising of
 Pre-built Use Cases

 Key Decision Documents

 Pre-Configured Instances

 Data conversion templates

 Configuration templates

 Key learnings from other project

Apart from the normal implementation, we also offer a rapid implementation which can be
completed in 3 month time-frame. A typically rapid implementation assumes not more than 2
integrations, conversions using FBDI templates, 30-40 use cases and 5 custom reports
developments. The typical rapid implementation plan would be as below
Sample List of use cases for telecom:
S.No. Description of the Use Case
1 Billing & Satisfaction: Single Handsets plus Plan
2 Billing & Satisfaction: Contract Termination
3 Billing & Satisfaction: Multiple Handsets Plus Plan
4 Billing & Satisfaction: Multiple Products and Plan
5 Billing & Satisfaction: Contract Modification
6 Billing & Satisfaction: Contract Add on
7 Downward Modification
8 Loyalty points - Termination
9 Family share - Multiple Lines
10 Loyalty points - Redemption
 
Sample List of Issues:
Below is the sample list of problem areas
1. How to determine the SSP (standalone selling prices)
2. Significant financing components on the contracts
3. Managing impacts on cost - both direct and indirect
4. Managing Discounts
5. Managing Variable considerations