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The ASC 606 transition for construction contractors

ASC 606 impact assessment for contractors

All companies must go through the process of applying the new standard and documenting their decision making process as well as adding significant disclosures for those decisions to their financial statements.

In this series of insights, we illustrate the critical new concepts of each element of the standard with construction industry-specific scenarios so you can begin to assess the impact it will have on your business. Though the effective date for compliance may seem distant, business systems, processes and controls should be implemented on Jan. 1, 2018 to provide the necessary information for reporting and disclosure for private companies.

Download this collection of insights as a supplement to our ASC 606 eBook

The ASC 606 transition for construction contractors:

Step 1 – Identifying the contract

Collectability

Combining contracts

Contract modifications

Step 2 – Identifying the performance obligations

Promises in contracts with customers

Principal versus agent considerations

Step 3 –Determining the transaction price

Variable consideration

Noncash consideration

Significant financing component

Step 4 – Allocating the transaction price

Standalone selling price

Allocating variable consideration

Changes in the transaction price

Step 5 – Recognizing revenue


Step 6 – Disclosures

Special considerations

ASC 606 time-sensitive data: Uninstalled materials at fiscal year-end

Tailored services to help you navigate the changes

ASC 606 significantly impacts business operations for construction companies. We have developed a six-step methodology to help you through the complex process of assessing impact, developing a plan, and implementing that plan across your organization.

Our construction industry specialists understand the revenue streams and various standards that apply to your accounting. We understand that not every organization needs assistance in every area of implementation and can provide you the type of support your organization needs.

Additional ASC 606 resources

For more information on this topic, or to learn how Baker Tilly construction specialists can help, contact our team.

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