16 August 2016 / Blog
JDE Blog Series: Get Ready for FASB / IASB Compliance with JD Edwards 9.2
December 2017 is just around the corner, will your organization be in compliance with the new FASB / IASB Revenue Recognition Accounting Standards?
Alert: Are you ready for the new standards for Recognition of Revenue issued by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) that go into effect mid-December 2017?
What you need to know: The new disclosure requirements are extensive and require changes to financial systems and processes to collect the necessary data—even if they have no significant impact on reported revenue.Why? The objective of the new standard (ASC 606 and IFRS 15) is to make it easier to compare reporting within and across industries and capital markets by employing a single, comprehensive revenue recognition model for all customer contracts.
Makes sense, right? Except that revenue recognition is one of, if not the most, difficult financial and accounting process to get right. It represents one of the highest risks of material error on financial statements and is a leading cause of restatements.
However, in a recent poll, fewer than 10% of respondents said their current financial systems support revenue accounting processes to achieve ASC 606 and IFRS 15 compliance. This means 90% may be exposed to revenue compliance risk.Translation please? Management will need to perform a thorough analysis of existing contracts, business models, company practices and accounting policies. For industries that applied industry-specific guidance under the old standard—including software, construction, and entertainment, media, and communications—the transition to the principles-based single standard is expected to be a major challenge.
Right now, most existing financial systems are not adequately equipped to handle the transition. In fact, most financial systems haven’t been able to handle the revenue automation needed to meet current GAAP requirements. Many organizations still handle multiple-element arrangements, revenue allocation, and contract provision-related revenue holds manually.
What’s the bottom line? In addition to revenue recognition rule changes, transition to the new standard will involve dual reporting and related disclosures. The time, effort and business disruption this will entail highlights the need to upgrade revenue automation capabilities as part of your company’s adoption planning.
The good news: JD Edwards planned years ahead to ensure 9.2 made it easy for customers to follow and comply with new government regulations. Additionally, 9.2 is enhanced to support the Affordable Care Act Employer Shared Responsibility provisions.JDE 9.2 customers can adopt the new FASB/IASB Recognition of Revenue standard at their own pace—up to one year earlier than the mandatory effective date (December 15, 2017, for public and December 15, 2018, for non-public companies)
JD Edwards 9.2 One View Reporting
EnterpriseOne One View Reporting helps ensure regulatory compliance by allowing financial end users to easily access and personalize transactional data into lists, charts, graphs and tables, and create personalized operational reports across EnterpriseOne in regulated areas including, but not limited to:
- Capital Asset Management
- Human Resources
- Procurement & Subcontract Management
- Rental Management
- Sales Order Management
How Velocity gets you to 9s before the FASB / IASB deadline
December 2017 is only 18 months away. Start your upgrade roadmap today to take advantage of the 100s of new applications, regulatory compliance updates and financial reporting improvements available in the most recent releases of your JD Edwards applications.
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Accelerate your cloud journey
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With Velocity, your JD Edwards Application is covered end-to-end
- End-to-end JD Edwards service team can handle all JDE upgrade and implementation requirements.
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