This presentation looks at new revenue recognition standard including the impact to business. The focus in on solutions as part of disclosing the new revenue recognition standard.

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© 2014 IBM Corporation
Revenue Recognition – IFRS and
FASB
Presenter: Paul Young, CPA, CGA – Proven Practice Adviser – Risk
Analytics, FOPM/FPM and Close, Consolidate and Reporting
Day: April 1, 2017

2. © 2012 IBM Corporation
Author / Bio
September 9,
2014
• Paul Young, CPA, CGA
• SME – Financial Performance Management (TM1, Cognos Controller and
Cognos Disclosure Management, OpenPages, Algorithmics, Cognos
Integrated Server, Cognos Command Center and Datawatch)
• Industry Experience
• 15+ years in Corporate Reporting, Budget & Forecasting, Costing,
Business Process Management, Internal Audit and Controls, Risk
Management, Financial Analysis, Costing
• 11+ years in financial solutions (FOPM, FPM, Risk, Office of the
Finance, Risk Management)
• 8+ years teaching Advance Finance, Advance Accounting, Public
Finance and Advance Management Information Systems
• Blogger in areas like Finance Analysis, Government policies, market
segment

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© 2014 IBM Corporation
Source – PWC

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© 2014 IBM Corporation
Source – American Bar

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© 2014 IBM Corporation
Revenue Recognition – IAS 18
. This could mean some projects could go from Percentage of completion to completed contract.
What’s next?
• Implementation 2018 or 2019 for private companies – Companies need more time to prepare
• Work is ongoing with source systems/reporting to meet the reporting requirement.
• 2017 likely will be the target date as companies like to have two years of data as part of their reporting cycle
Option:
• New exhibits/notes will be required as part of disclosing the change and/or details. The notes disclosure
feeds into Cognos Disclosure Management as well as TM1. TM1 could be used for budgeting/re-statement
• A template could be included as part of the reporting requirement as way to build the exhibit/note into the
10K/10Q reporting

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© 2014 IBM Corporation
Revenue Recognition – IAS 18
This objective of this project is to develop a single conceptual model, and general principles, for determining
when revenue should be recognized in the financial statements. This single conceptual model would apply to all
industries and all types of revenue-generating transactions.
Currently, IAS 18 provides guidance on revenue recognition. However, it provides little guidance on revenue
transactions with multiple components (for example, sale of hardware combined with software, and sale of
hardware combined with service). The new standard will address the components part of the contract.
The second part of the standard deals with the performance obligation of the contract. Warranties will be broken
down between product warranties and performance based warranties.
Construction Contracts will also be impacted by the new approach, because the new standard will look at when
ownership has transferred and this will determine how the revenue will be recorded. This could mean some
projects could go from Percentage of completion to completed contract.

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© 2014 IBM Corporation

8. © 2012 IBM Corporation
Solutions
September 9,
2014
• Watson Analytics -
https://www.ibm.com/communities/analytics/wa
tson-analytics-blog/5-new-things-about-
watson-analytics-you-need-to-know/
• IBM Cognos Disclosure Management /
Reporting tool - http://www-
03.ibm.com/software/products/en/cognos-
disclosure-management
• IBM Sustainable Reporting:
https://www.ibm.com/ibm/green/sustainability_
solutions.html

9. © 2012 IBM CorporationSeptember 9,
2014
• Additional Sources
• Paul Young (email: paul.young@ca.ibm.com)
• IBM Close, Consolidating and Reporting, Risk and Planning Analytics
• http://www.ibm.com/analytics/us/en/business/financial-reporting/
• http://www-03.ibm.com/software/products/en/planning-analytics
• http://www.ibm.com/analytics/us/en/business/governance-risk-
compliance/
• Reporting Pain Points -
http://www.slideshare.net/paulyoungcga/reporting-challenges-for-
accounting-and-finance-january-2017
• Pension Reporting
• https://www.slideshare.net/paulyoungcga/pension-accounting-rules-
and-automating-solutions