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Marcus R. Harwood, CPA, MSPA
is a partner with BlumShapiro and
leads the firm's education practice.
He has extensive experience in
serving a wide range of industries,
including nonprofit organizations,
educational institutions, long-term
care, healthcare, colleges, ac-
counting and auditing, financial
services, IT controls and risk as-
sessment, and transaction advi-
sory services. He can be reached
1. Identify an implementation steering committee.
The steering committee should have senior management sponsorship and
include an appropriate allocation of resources. In addition to accounting and
finance personnel, depending on the nature of the entity, the committee may
need representatives from tax, sales, and IT.
2. Obtain appropriate training for steering committee members.
The level of training will depend on the baseline accounting knowledge of
each committee member and their role in the project. For non-financial
management, an overview of the new standard may be appropriate, whereas
for financial management, detailed review of the standard and interpretative
guidance will be necessary.
3. Prepare an inventory of revenue streams.
The listing of revenue streams will provide the starting point for analysis under
the new revenue standard. As such, it is important that each revenue stream
is identified early in the process. The identification should be reviewed by
sales and executive management for completeness.
4. Analyze each revenue stream under the new revenue standard.
Depending on the number of revenue streams, it may be more practical to
break up the analysis for each revenue stream into a separate analysis.
5. Formulate preliminary conclusions regarding:
a. Changes in revenue recognition,
b. Changes to disclosures, and
c. Planned adoption method (full retrospective or modified retrospective)
and practical expedients.
6. Conduct an auditor checkpoint.
Discuss analysis and preliminary conclusions with the external auditor, and
identify if further analysis or considerations are necessary.
7. Update prior analysis as needed.
8. Identify changes required for internal controls.
Include consideration of training for accounting, finance, sales, and IT employees.
9. Identify changes required for IT systems.
10. Document the impact on stakeholders and create a planned
communication approach.
This includes changes for:
a. Shareholders,
b. Lenders,
c. Employees (such as compensation arrangements, etc.), and
d. Income tax reporting.
11. Implement changes.
12. Conduct a post-implementation review.
While one size may not fit all, companies should
consider developing an implementation workplan
containing the following steps:
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