Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

Revenue Recognition in 2015:

What Your Company Needs to

Get Done

• Provide an update on information and perceptions relating to

the new revenue standard

• Define an implantation plan for the new standard for your

company that allow you to understand and mitigate the

impacts of adoption on your company’s financial statements

• Identify gaps in people, process, and technology at your

company that will need to be addressed to ensure the

successful execution of your company’s implementation plan

for the new standard

After attending this event you will be able to:

Learning Objectives

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Welcome to Proformative

Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

Revenue Recognition in 2015: What Your

Company Needs to Get DoneSteve Jackson, Senior Consultant, RoseRyan

Mike O'Brien, General Manager, Financial Management Applications,

FinancialForce.com

Steve Jackson, Senior Consultant, RoseRyan

Steve Jackson has over thirty years of accounting experience in the high-tech, software

and retail industries. He has worked as the sole member of a finance organization,

strong individual contributor as well as a manager and director of a finance and

accounting group. He has a strong background in revenue recognition and accounting

operations. Steve has a bachelors degree from University of Illinois – Champaign and a

CPA (inactive)

Mike O'Brien, GM Financial Application Management Applications,

Financial Force.com

Mike has over 30 years of experience working in a variety of senior management

positions across Finance, Operations, Sales, and Products in the software and service

industries. Previously, Mike served as CFO for an employee benefit administration firm,

where he oversaw the successful implementation of Salesforce CRM and helped grow

the business 40% year over year for five consecutive years. Mike's experience lends

him acute expertise in aligning strategy, technology, finance and sales. Mike graduated

Cum Laude from Southern New Hampshire University with a BS in Accounting.

Presenters

• Define internal ownership – how to “go to market” in

your company

• Understanding impact to your financial statements

• Determine your reporting methodology

(retrospective or modified retrospective)

• Interim disclosures

• Systems considerations

Agenda

History

• SOP 97-2, EITF 00-21

– VSOE

– Multi Element Arrangements

• EITF 08-01 (ASU 2009-13), EITF 09-03 (ASU 2009-

14):

– Relates to revenue arrangements with multiple deliverables

– Arrangements with hardware and software

• ASU 2014-09

– GAAP and IFRS Standard

– Principal vs. Rules based approach

Rev. Rec. 2015 – Getting it done An Overview of the New Revenue Standard

• 5/28/14– Final standard is issued

• 6/3/14 – FASB/IASB announces Transition Resource

Group (TRG)

• 7/18/2014 – First TRG meeting and met again on 10/31/14

• Future Meetings in 2015 Jan 26, Mar 30, July 13, Nov 9

• Gross vs. Net Revenue

• Sales based on usage/royalty

• Variable consideration, Significant financing component

• Collectability

• Customer Options for goods or service, upfront fees, etc

• Impairment of capitalized contract costs

• Financial presentation, etc.

Background: Evolution of the New Revenue Rules

• Public companies: annual and interim periods

beginning > 12/15/2016

• Private companies: one year deferral

• Early adoption:

– Prohibited under US GAAP

– Allowed under IFRS

• Adoption method:

– Full Retrospective

– Modified Retrospective

Background: Key Implementation Dates

1. Identify the contract with the customer

2. Identify the separate performance

obligations

3. Determine the transaction price

4. Allocate the transaction price to

separate performance obligations

5. Recognize revenue when each

separate performance obligation is

delivered

Basics of the new rules 5 Steps to Revenue

I. Determine the Players

a) Finance team

b) Key departmental stakeholders (the

“core” team) involved:

Sales, Sales Finance, Sales

Operations, HR, IT, Accounting,

Finance, FP&A, Contracts, Legal, Tax

b) Senior Executives

c) Need to communicate with:

Audit Committee

Audit Firm

Go To Market Within your Company

Thank you for your interest in this presentation.

View the on-demand webinar or download the full

presentation at:

www.Proformative.com

Revenue Recognition in 2015: What Your

Company Needs to Get Done