Addressing Disclosure Information Under the New Revenue Standard June 6, 2019 By: Claudia R. Wolter There are a lot of new disclosures required. Some are policy and can be written/determined at any time during 2019. Others are more pervasive and you may need to make system changes now in order to capture the information needed for your 2019 financial statements. GAAP now requires a footnote disaggregating revenues. What does that mean? Revenues must be disaggregated according to the timing and qualitative information about how economic factors will affect the nature, amount, timing, and uncertainty of revenue and cash flows. You must chose the disaggregation categories that make sense to your organization. Some common categories include: Geographical regions Service lines Segments Departments Customer type Contract type Timing (Point in time versus over time) The standard includes a practical expedient for private companies that allow a company to default to “timing” (point in time versus over time) to disaggregate revenues. If you are a contractor who sells goods at a point in time, this could be an easy “disaggregation” solution for you. Some examples include: Paving contractors with asphalt plants that sell to other contractors Landscaping contractors who sell materials to others Clearing contractors that sell mulch or excavated materials (dirt, etc.) There is no guidance regarding which categories of disaggregation to use. The goal is to provide users with useful information. You may want to speak to the users of your financial statements, especially your bonding company, to determine if there are any categories they would like to see. KatzAbosch has individuals experienced in contractor issues and trained in process improvement using lean six sigma principles that can help you through this transition. Ready to implement? Click here to view some items you need to consider for this area. Article by: Claudia R. Wolter Claudia Wolter, a Shareholder with KatzAbosch, joined the firm in 1988. She has played a major role in leading the firm into the 21st century with cutting edge initiatives, including the transition to and managing of a paperless environment. She serves as Co-Chair of the firm’s Accounting and Auditing Services Group, assists in the quality control management and oversight of the firm, and is a member of the Construction and Real Estate Services Group. Most recently, Claudia served as a contributing author of “Construction Accounting,” an in-depth guide to construction financial and accounting issues for attorneys distributed by the American Bar Association. A dedicated professional, Claudia holds the prestigious distinction of Certified Construction Industry Financial Professional (CCIFP), a certification held by less than 50 professionals in Maryland and less than 1000 professionals in the United States, the designation of Certified Construction Auditor (CCA) from the National Association of Construction Auditors (NACA) and a Lean Six Sigma CPA Green Belt certification from Ohio State University ATI and Boomer Consulting, Inc. About KatzAbosch: Founded in 1969, KatzAbosch is one of the largest CPA and business consulting services in the Mid-Atlantic region. As an accounting firm, our mission is to provide the highest quality accounting, tax, financial and management consulting services to our regional clients. We understand the needs and challenges of our clients and we have made it our obligation to create, grow and protect asset value. KatzAbosch is consistently named a Best Accounting Firm to Work For in Accounting Today and has been named a Top 200 Accounting Firms in the Nation by Inside Public Accounting. Our firm is also ranked among the Top 15 Largest Accounting Firms in the Baltimore Area by the Baltimore Business Journal and a Top Workplace four times by The Baltimore Sun.