Budgets are greater than were expected. Most companies (75%) report that total costs have increased since their revenue recognition program was initiated. On average, public and private companies are estimating $3.3 million in total costs. In a 2017 EY survey of finance and IT professionals, more than half (55%) anticipated it would cost $1 million or less to implement the changes.
Eighty-eight percent of all organizations surveyed found getting the required data for the new financial disclosures challenging. More than 80% will use or have used manual workarounds in their reporting.
Per the survey results, there is no question that implementing the new revenue recognition standard has presented a significant financial, technological and operational challenge, which is bigger than what most companies anticipated. And just because the implementation date has passed for public companies, it does not mean revenue recognition implementation is complete.
Transitioning short-term manual workarounds to long-term technology solutions and adapting programs to reflect comments received from regulators, auditors and other stakeholders means significant work is still ahead. It’s likely that private companies will also be dealing with many of the same issues over the next year or more.
Despite the work still to come, there is some good news.