Are You Ready for ASC 606?
ASC 606 will have a major accounting impact for any entity which receives contingent commissions. In general, you will be required to recognize any estimated future commissions as revenue at contract inception.
In 2014, the Financial Accounting Standards Board (FASB) released Accounting Standards Update 2014-09: Revenue from Contracts with Customers and created Accounting Standards Codification (ASC) Section 606. For private companies, this standard is effective for annual reporting periods beginning this year.
Kerper and Bowron LLC can assist you with estimating the future profits of your contracts at the time of sale and provide necessary support for auditors.
For more information, see https://www.kerper-bowron.com/asc-606