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RevPro's approach to

ASC Topic 606

September 25th.  2014
Presented By -

     

Jeff Jackson Kathy Pearson Jagan Roddy
V...
Disclaimer

This presentation is intended only for the registered recipients.  and may not be
distributed or disclosed to ...
Webinar Guidelines

Submit questions online using the
webinar tool (Question bar)

we expect a lot of questions.  We
will ...
F7tG_’ re iiiy t iii 
5 + 7 + 6 Q +

Years Of mtense TeVeflUe Business Verticals Customers
automation served
120+ 200+ 250...
New Rules:  From Six “Steps” to Five

4 criteria to recognize 2 additional steps 5 steps to recognize

0 Evidence of Arran...
1 I4!

n-Ti‘. 

r“ . 

tjifiiii ‘i “ Identify the contract

CL"; “i‘7$; ““. t Ftlnclionality  3.0
Rules engine to group tra...
fa

; ‘:if‘7’i; ‘=; i‘.  ’ Identify Performance Obligations

,  .1 I».  i—l‘i. 

C: .t. :': “c: :“: .t t: t.lflCtt0ftZ? .!...
Step 3: Determine Transaction Price

Current Functionality RevPro 3.0

0 Define rules to automatically adjust
transaction ...
Step 4: Allocate Transaction Price

Current Functionality RevPro 3.0

Tagging of transactions as standalone
Ability to upl...
Contract Modifications and Allocations

New Contract

Addition of product/ service
that is distinct and
represents it's fa...
Step 5: Recognize Revenue

Current Functionality RevPro 3.0
0 Robust revenue timing engine 0 Release revenue based on
capa...
Contract Costs

Current Functionality

0 Capture of COGS with revenue

9 Recognition of COGS to follow revenue
or separate...
Reporting and Disclosure

Current Functionality RevPro 3.0
0 Reporting framework which allows 0 Contract Asset.  Contract ...
Multi Books Processing] Reporting
@

Define Multi Books Multiple Revenue Calendars

You can define unlimited Revenue calen...
When should you start? 

Awesome if you started already

 

Amie time to: 

Plan.  review and document policies
Educate cr...
Supported Transition Options
Option 1: Option 2:

Process historical transactions under new Start with parallel processing...
Supported Transition Options

Option 3: This option is for customers adopting cumulative adjustment only

Process historic...
Sneak Peeks starting in December

Customers Partners
Date :  TBD Date :  TBD
Place :  San Francisco Place:  San Francisco
...
§‘i't

 1 ~ t—~__ Let Leeyo/ RevPro updates get to
‘ you on time. 
Follow us on : 
‘i  :  .-§. i-‘i
S www. leeyo. com sale...
T’

if” www. leeyo. com sales@leeyo. com  (408) 988-5800

C 2014 Leeyo Software.  inc All Rights Reserved Confidential inf...
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Leeyo RevPro Approach to ASC 606

Slides from Leeyo's webinar about the ASC 606 revenue recognition guidance.

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Leeyo RevPro Approach to ASC 606

  1. 1. RevPro's approach to ASC Topic 606 September 25th. 2014 Presented By - Jeff Jackson Kathy Pearson Jagan Roddy VP, Sales - Leeyo Director of Technical Accounting - Leeyo CEO, Founder - Leeyo
  2. 2. Disclaimer This presentation is intended only for the registered recipients. and may not be distributed or disclosed to third parties without Leeyos express written consent. The material presented is made available with the caveat that the the final product may change and Leeyo makes no representations accordingly. Due to the competitive nature of our industry, this presentation does not include product images. Leeyo will provide product demonstrations to customers and partners on an invitation—only basis at a later date.
  3. 3. Webinar Guidelines Submit questions online using the webinar tool (Question bar) we expect a lot of questions. We will try to pick the most asked/ n r , _ critical questions "’ Other questions will be answered 1. ‘I noi“, ;~"? evP r0 Cusiti f"{‘; e rs offline and will be available on our website soon after this webinar , -l , _ . N V V, cgstomez s and p2; hers Please answer the three polling questions as they appear C 2014 Leeyo Software. inc All Rights Reserved Confidential information
  4. 4. F7tG_’ re iiiy t iii 5 + 7 + 6 Q + Years Of mtense TeVeflUe Business Verticals Customers automation served 120+ 200+ 2500+ Empieyees Billions in revenue Social media processed followers Supported © 2014 Leeyo Software. Inc All Rights Reserved Confidential information
  5. 5. New Rules: From Six “Steps” to Five 4 criteria to recognize 2 additional steps 5 steps to recognize 0 Evidence of Arrangement ldentifi’ the Contfact O Q Reasonably Collectable Q Identify Elements T) Identify Performance Obligations Q 0 P| 'lCe Fixed afld Detefminable Determine Transaction Price 9 O Allocate Revenue -T-) Allocate Transaction Price 9 © 2014 Leeyo Software. Inc All Rights Reserved. Confidential Information.
  6. 6. 1 I4! n-Ti‘. r“ . tjifiiii ‘i “ Identify the contract CL"; “i‘7$; ““. t Ftlnclionality 3.0 Rules engine to group transactions across: System—wide grouping rules with ability to Contracts manually regroup transactions differently Sales orders for each set of books Customers Time period (orders in 90 days) Any attribute brought into RevPro No limit in number of grouping rules: Sales channel Customer Type Region _ _ Current functionality will also be Any attribute brought into RevPro available in new version Manual linking of transactions Automatically linking and re—allocation for contract modifications C 2014 Leeyo Software Inc All Rights Reserved Confidential information
  7. 7. fa ; ‘:if‘7’i; ‘=; i‘. ’ Identify Performance Obligations , .1 I». i—l‘i. C: .t. :': “c: :“: .t t: t.lflCtt0ftZ? .!§l. ‘;/ " 2 fPro Bundle Explosion; Rule—based engine to support: Break out bundle SKU into separate Mappmg °f 9°°d. S/s. eN'Ces to performance obligations deliverables Grouping multiple goods/ services into single Assign FV at separate deliverable performance Obligation Separate timing of revenue across deliverables Automatic addition of new performance Dependent Contingency: °b”9<'= ‘“°“5 Allows recognition of multiple deliverables Assigning revenue triggers to performance from single revenue trigger obligations Manual creation of performance obligations C‘ 2014 Leeyo Software inc. All Rights Reserved Confidential Information.
  8. 8. Step 3: Determine Transaction Price Current Functionality RevPro 3.0 0 Define rules to automatically adjust transaction price by % or fixed amount. based on: Contract Performance Obligation item 0 Transaction price for each line can be adjusted before performing allocations and recognition 0 Manually adjust transaction price . Track and analyze changes for reporting and disclosures 2014 Leeyo Software inc. All Rights Reserved Confidential Information.
  9. 9. Step 4: Allocate Transaction Price Current Functionality RevPro 3.0 Tagging of transactions as standalone Ability to upload fair value Two step allocation methodology (Relative and Residual. ) with VSOE failure notification for SW items Contingent and non-contingent allocation functionality Retrospective and prospective re- allocation 0 Fair Value calculator - VSOE/ ESP 0 Fair Value calculator includes Standalone User defined stratiflcations Selling Price (SSP) User defined populations 0 Assign different SSP to a goods/ services depending how they are sold (bundled/ individually) Residual approach for estimating (SSP) Removal of ‘cash’ cap for recognition Dynamic application of retrospective vs. prospective re—allocation © 2014 Leeyo Software inc. All Rights Reserved. Confidential Information.
  10. 10. Contract Modifications and Allocations New Contract Addition of product/ service that is distinct and represents it's fair value contract elements (concession. change in variable mo aiiocaiion adjustments) consideration est. cancellation) Retrospective Allocation Adjustment to original Prospective Allocation Retrospective Allocation Remaining elements; are Remaining elements are distinct from the delivered not distinct from the elements delivered elements © 2014 Leeyo Software. inc. All Rights Reserved. Confidential Information.
  11. 11. Step 5: Recognize Revenue Current Functionality RevPro 3.0 0 Robust revenue timing engine 0 Release revenue based on capable of handling: Performance obligation Multiple reasons for revenue deferral triggeis/ eVent5 Dependent contingencies 0 Accounting for Contract Assets Release revenue based on events and Liabilities Manual deferral and release Can handle complex rules for release Release revenue before invoicing - unbilled Approval engine Q 2014 Leeyo Software. inc All Rights Reserved. Confidential Information
  12. 12. Contract Costs Current Functionality 0 Capture of COGS with revenue 9 Recognition of COGS to follow revenue or separately 0 Reporting for COGS RevPro 3.0 Capture of additional classifications of costs to obtain or costs to fulfill a contract Define rules to assign costs Ability to load cost at later stage and account for it correctly Reporting for additional classifications ‘Q 2014 Leeyo Software. Inc All Rights Reserved Confidential Information.
  13. 13. Reporting and Disclosure Current Functionality RevPro 3.0 0 Reporting framework which allows 0 Contract Asset. Contract Liability reporting based on any attribute in RevPro Rollforward 0 Standard reports include: 0 Enhanced revenue facts: Revenue from previously satisfied Revenue waterfall performance obligations Deferred Revenue Rollforward Deferred COGS Rollforward Revenue recognized from contract liability Unbilled AR Rollforward balance Unreleased contingencies 0 Amount allocated to unsatisfied performance obligations and timing of recognition C‘ 2014 Leeyo Software. inc All Rights Reserved. Confidential Information
  14. 14. Multi Books Processing] Reporting @ Define Multi Books Multiple Revenue Calendars You can define unlimited Revenue calendar will be books and configure system copied across books and can be options by books operated individually ® Parallel Processing and Robust Reporting Cut-Over Process transactions under different period in different books. When ready to migrate to new guidancejust switch your primary book Reporting framework to support multi books and comparative analysis 2014 Leeyo Software inc All Rights Reserved Confidential information. @ Separate Rules Rules can be unique to books or across books ® Post Back To ERP Enable which books should post to ERP and configure to post to different accounts and books/ company codes
  15. 15. When should you start? Awesome if you started already Amie time to: Plan. review and document policies Educate cross functional teams Make process and system changes Systematically capture required information upstream Implement new or upgrade existing systems for rev. rec. automation Process and analyze data in multiple ways to see how the new rules impact your revenue Expect most companies will be in this category Still time left to: Quickly plan. review and decide policies Identify methods to capture required data points for new and existing transactions (systematically or manual upload) May not have enough time to implement upstream system process and changes. May have to start processing new transactions under new guidance and catch-up on old transactions over the time C 2014 Leeyo Software. Inc All Rights Reserved Confidential Information You don't want to be in this category —-—> Better to avoid this situation: Resource constraints both internal and external Disconnected automation or manual processing will be the only option Risk of delayed 1st quarter close Risk of misstating revenue
  16. 16. Supported Transition Options Option 1: Option 2: Process historical transactions under new Start with parallel processing on new arrangements guidance (Q1-FY2015 and prior periods) from O2-FY2015 and going forward 1 1 Come back and process historical transactions under parallel processing going forward <02‘ new guidance (Q1-FY2015 and prior periods) FY2015 and future periods) 1 1 Merge data from above 2 steps when historical Cut-Over to new guidance O1—FY2017 transaction processinglis completed 1 Cut-Over to new guidance Q1-FY2017 You will have ability to decide full retrospective 1 or cumulative adjustment during cut—over _ , _ _ _ You will have ability to decide full retrospective or cumulative adjustment during cut—over C 2014 Leeyo Software. inc All Rights Reserved Confidential information
  17. 17. Supported Transition Options Option 3: This option is for customers adopting cumulative adjustment only Process historical transactions with deferred Q1‘ FY2017 -9 balance as of O4-FY2016 under new guidance Cut-Over to new guidance Q1—FY2o17 1 Run parallel under old and new guidance for FY2017 1 Stop processing under old guidance from Q1—FY2o18 Ct 2014 Leeyo Software. inc All Rights Reserved. Confidential Information
  18. 18. Sneak Peeks starting in December Customers Partners Date : TBD Date : TBD Place : San Francisco Place: San Francisco By invitation only Look for invitation in your email soon Of course. we will have fun too ll! © 2014 Leeyo Software. Inc. All Rights Reserved. Confidential information.
  19. 19. §‘i't 1 ~ t—~__ Let Leeyo/ RevPro updates get to ‘ you on time. Follow us on : ‘i : .-§. i-‘i S www. leeyo. com sales@leeyo. com (408) 988-5800 C» 2014 Leeyo Software. inc All Rights Reserved. Confidential information
  20. 20. T’ if” www. leeyo. com sales@leeyo. com (408) 988-5800 C 2014 Leeyo Software. inc All Rights Reserved Confidential information

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