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Avoid the Rev Wreck

10.09.2018 | Published By:

Russell Naisbitt

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Avoiding a Revenue “Wreckognition” Nightmare

How the new Revenue Recognition Standard Could Impact D

The way entities recognize revenue and certain expenses associated with obtaining or fulfilling contracts is changing as a result of the new revenue recognition accounting standard (ASC Topic 606).  It is important that entities understand the impact of these changes on financial metrics impacting their debt covenants so that Rev Rec does not become a Rev Wreck!

The repercussions of changes in financial metrics could impact all kinds of contractual arrangements including, but not limited to: executive compensation, sales compensation, employee profit share, earnouts and loan agreements.  

Tags: financial consulting firms,strategic planning,financial strategy,executive leadership,operational advice,revenue recognition,cash flow management,risk mitigation