Results from Reader Survey: Is Your Nonprofit Prepared to Implement the New Revenue Recognition Standard, ASC 606?

Last month, we asked you to share your thoughts on ASC 606, the new revenue recognition standard issued by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) in May of 2014. Although a potential delay in the implementation date is being discussed, we are continuing to stress the need for nonprofits to become familiar with the ASC 606 and begin proactively preparing for its implementation. As FASB officials gather feedback from stakeholders, organizations should start preparing now, regardless of whether or not a delay is approved.

With that in mind, how familiar and prepared are our readers for ASC 606? 

As we expected, there’s room for improvement. The survey results reveal that the majority (57 percent) of you are only somewhat familiar with the new standard, while a notable 19 percent of you are not at all familiar with it. In responding to the upcoming changes, 38 percent of you are looking for guidance on implementation, and 29 percent are still in the process of analyzing the changes. Meanwhile, nearly one-in-five (19 percent) have yet to read through the standard at all.

Considering the majority of respondents are either awaiting guidance or still absorbing the changes, it comes as little surprise that more than half of you (57 percent) have not analyzed the standard enough to determine which key element of the new standard would have the greatest impact on your organization. Still, for those of you who have considered its impact, the new financial statement and disclosure requirements are top of mind.

As nonprofits look to the implementation of ASC 606, they should be considering not only their organizations’ accounting policies and procedures, which is a necessary first step, but also what resources their organization will need, including people, processes, systems and technology, as well as departmental and program services beyond their finance and accounting teams. This will help organizations to become and remain compliant with the new standard in the future.

For a full breakdown of readers’ responses, take a look at the charts below. Meanwhile, be sure to visit BDO’s Revenue Recognition Resource Center for additional information about ASC 606 and, in case you haven’t already done so, read through Lee Klumpp’s blog post to learn how the revenue recognition accounting standard could impact your nonprofit organization, and what you can do to prepare.
 

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