Transition Methods to Consider When Implementing The New Revenue Recognition Standards June 19, 2019 By: Claudia R. Wolter There are several methods to transition: full retrospective or modified retrospective. Full retrospective restates all prior periods included in the financial statements. Modified retrospective allows you to report 2018 under old GAAP and 2019 under new GAAP. However, you need to disclose 2019 information under old GAAP. Both of these methods require you to calculate one year under two different methods. The other option is not issuing comparative statements for 2019. What do you need to consider when implementing the new standards and how the transition will be reported in the financial statements? In order to determine the most appropriate transition for your organization, you will want to ask yourself: Do you want to issue comparative statements which require reporting one year under two methods? If so: Do you want to use the full or modified retrospective approach? How will you go about restating 2018 under the new method or calculating 2019 under the old method? What are the additional costs and required resources? Will the users of the financial statements accept a single year statement for 2019? (Talk to the bankers and bonding companies now to get their blessing!) If single year statements are not an option, Will the users of the financial statements allow a GAAP departure to report under the modified retrospective approach but exclude the disclosures for 2019 under the old method? If not, circle back to the first bullet point above. Who is going to calculate the adjustment to beginning equity and when? Entities should consider the benefits of each method as well as the costs of implementation. KatzAbosch has individuals experienced in contractor process improvement methodologies that use lean six sigma principles to help you through this transition and determine which method is right for your organization. If you have any questions about this information please contact your KatzAbosch representative; or contact us by clicking here. 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.
5 Time Sensitive Projects Medical Practices Can’t Ignore in 2021 January 14, 2021 By: Maureen West McCarthy Medical practices should prioritize these 5 time-sensitive projects for the first quarter of 2021. Ever-changing … Read More
SBA Proposes Loan Necessity Questionnaire for PPP Borrowers with Loans of $2M or More November 2, 2020 On October 26, 2020, the Small Business Administration (SBA) issued a notice in the Federal Register that, … Read More
