Dog Day Afternoons

BrunsliSmallMy dog Brunsli is not fazed by the hot and humid weather, she just sleeps it away in the cooled house! Hope you are staying cool! Lots responded to my Lemonade request and it has been great to catch up with so many. It is still hot enough to have Lemonade, so don’t be shy….

This has been a summer of many distractions and also points to pause. Europe with its Brexit, multiple terrorist attacks, Deutsche Bank possibly in need of a bail out and overall currency fluctuations. This may indeed affect your business if you are doing business in Europe.

Here we are in the middle of the US presidential campaigns. It is not politics as usual……or is it?

Last week I attended the funeral of a client and dear colleague, Kevin Gosnell. Kevin was the CEO of T&K Asphalt Services, loving husband of Kathleen and father of three handsome sons. He died of ALS after a 15-month battle. What is so remarkable about Kevin is that once he was diagnosed with the incurable disease, he pulled out all plugs and decided to use his leadership skills from running his company and the Vistage group we shared, and bring the fragmented medical community together to pool funding and speed up research through ALS One with the hope to eventually have a cure. Take a look of the videos and support this great cause. Kevin is a hero in my eyes in how he took is death sentence public and made an incredible difference in a very short time. RIP Kevin and healing thoughts to his family.

Life intertwines with business as we all know. I am sure you are looking for the balance the way I have and figuring out where to draw the line. Take a moment these last few days of summer to reflect on where you are, what is good and what is possible to change.

Have you taken a closer look at the internal and external risks of your business? Most internal risks you can actually eliminate. What succession plans do you have in place?

Externally, mitigating risks for your business can be tricky, but being aware of the potential economic risks and implementing some buffers into your financial plans is a good strategy to consider.

Here is a blog post that may help you get started
https://nssblog.com/2015/11/09/de-risk-your-business/

Want to have a conversation over lemonade call me at 781-929-9125.
In the meantime, stay cool, Rudi

Every CEO Faces Agility Issues

Our 3rd CEO Leadership Event of our 3-part Series at the Lanam Club, Andover

Wed, May 18th from 12noon – 2pm- JOIN US!

HOW DO SMART COMPANIES GROW?

What can we learn from fast growth businesses and why you need to know?  What is the fundamental path to growth in a fast paced business environment? Here are the 3 Reasons:

  1. The economic picture will continue to change, both internationally and nationally, affecting all businesses small and large. EVERY business needs to understand how to become more adaptive and agile against this volatility to survive.
  2. How do fast growth businesses adapt daily to these external changes and how do they keep their businesses agile? The CEOs will describe the different stages of growth and how it affects their culture; how they go about finding the right people, a challenge we all face.
  3. Come and hear how the digitized world helped them and what YOU can apply to your business today!  An industry agnostic approach.

REGISTER TODAY TO HAVE A SEAT AT THE TABLE!

PANELISTS:

CloudLock   Gil Zimmermann, CEO & Co-Founder, CloudLock

Mobiquity   Bill Seibel, past CEO, Mobiquity

CTP   Chris Greendale, Founder & CEO, Cloud Technology Partner

MODERATOR:            Rudi Scheiber-Kurtz, Founder & CEO, Next Stage Solutions, Inc

WHERE:  The Lanam Club, 260 N Main Street, Andover, MA 01810

Register Today!

Rudi Scheiber-Kurtz of Next Stage Solutions, Inc. | 617. 449. 7728

Andy Snider of Snider Associates | 617. 947. 1170

SniderNSS

Goldilocks | Fits Just Right

The Goldilocks Syndrome – Fits Just Right?

By Rudi Scheiber-Kurtz, CEO of Next Stage Solutions, Inc. – 617-449-7728

Maybe the business model at Next Stage Solutions (NSS) I pioneered in 2007 has been too early, I don’t think too late, but I am hoping it fits just right for your needs today!!

Image result for goldilocks three chairs image free

The knowledge economy demands simple solutions to complex problems.  As a team of executives at NSS we are upending the traditional models of consultants and temporary workers.

Today’s lean management team wants to cap their costs, keep agile and are in continuous improvement mode.  Having the ability to change on a dime, you need a faster, lower-risk and flexible talent model that gives you a competitive advantage.  I am not talking about administrative temp work, I am talking about senior level professionals who bring a specific expertise to you when you need it.

With small and midmarket companies in mind, I created a talent model for your needs.  It is my hope that we are part of a micro trend in how to access high-level expertise on-demand and prove our effectiveness is palpable to having skin in the game.

Our niche market is where finance, operations and strategy converge.  Your executive team will go through ebbs and flows, in fact your business will too, so accessing professional talent when needed and as a variable cost, expands your boundaries of success.

This type of independent talent is a bit of a different breed.  We bring diverse and innovative ideas to the table. We see it as a responsibility to discuss the difficult stuff with you, problem solve and support you with the necessary changes and implementations.  Contrary to common believes, we are deeply engaged with our clients and take great pride in finding together the right solution for each challenge. We are not in between jobs, we choose the independent route with the right clients.  

We also don’t tell you what to do, we work with you and your team, let you come to your own decisions and hold you accountable for the actions you committed to so you can get to your next stage.  Working with multiple clients keeps us in the know, current of market trends and innovative in tackling your challenges.

Another piece I have added to the NSS model, is how we work internally as a team.  We empower each other and this collective knowledge has an exponential affect serving our clients in a myriad of ways. With NSS you work with senior level professionals, unlike the juniors of a consulting firm.  We also don’t give you a report full of suggestions and then leave you in the dust.  NSS helps you integrate and implement the changes, offloading some of your precious time.  We are good at it and have done this many times over.

I can tell you with confidence, that we dramatically lower your risk when you work with us.  We can be your Champion in a new product launch, an acquisition integration or a particular transformation phase.  You are the one who sets the dial up or down, gets an initiative managed, implemented and integrated without making a major capital investment.

Of course you are concerned about sensitive information and difficult situations.  As senior professionals who have been on your side on executive teams, we bring our sensitivity and work diligently on your side. We will be glad to sign a confidentiality agreement.

I know that the Executive-as-a-Service Model is an emerging market, and we may be a little ahead of ourselves.  Larger companies are starting to see the value in bringing in expertise when needed.  Axiom, a company that offers 650 temp lawyers to nearly half the Fortune 100 has shown billing of over $100million in 2012 according to a Harvard Business Review article “The Rise of the Supertemp”.  Larger firms have begun to access independent professionals with great success.  Why not you? We want to bring it to you, the small and midmarket business.

Knowing that this talent model is available to you, you may want to try your new product launch or acquisition sooner.  Tapping into this pool of expertise, or Executive-as-a-Service, can position you way beyond the competition!

Throw out the old habits, the traditional and make way for innovative solutions that match the 21st century demands to new, dynamic and innovative solutions. Find the right talent at the right time so you can achieve success through simplicity within the complex world we live on.

This type of talent offer is a new way of thinking. Access senior level intellectual skill set, just not permanently.

Give us a try.  Have a cup of coffee or take a walk with us and get to know us.  We want to learn from you and what holds you back in engaging expertise on-demand.  How do you access special skills when you need it and with minimal risk? Do we Fit Just Right for your needs!

617-449-7728

CFO Coaching & Mentoring

CFO Coaching & Mentoring at NSS

CFO Image

You have heard a lot about how the CFO position has become more complex and demanding over the years. Let’s also acknowledge, that a typical midmarket CFO oversees different parts of the finance spectrum. Sometimes they are called Controllers who do CFO level work and sometimes it’s the other way around. So for our point of view, let’s define this position as Head of Finance in your company.

The Head of Finance is often a person who has been with the organization for some time, and has enjoyed a number of promotions including a title promotion from Controller to CFO acknowledging the increased transactions associated with the business growth. More employees are added, additional markets entered and products introduced, and the financial management expectations become more and more complex.

The challenge for a growing business is you must now consider an operational and results driven CFO who is capable and has the time to discuss your growth opportunities. Ideally, you want your finance department to provide a valuable service to the organization, rather than be seen as an isolated department that provides results/numbers only. One who embraces walking the floor, talking with sales and operations and helps them problem solve with specific issues. The compliance and fiscal responsibilities are a given, delegated and with oversight by the CFO.

Has your Head of Finance kept up with professional development and courses to handle the increasing demands of their job? In all fairness, things get so busy and besides, an evolving CFO is not often asked to participate in key decisions and apply their respective business insight. The CEO or Business Owner is very loyal to that Head of Finance and typically wants things to work out.

Understanding and accepting that loyalty is the key reason for stability, NSS has developed a program to mentor and coach your existing Head of finance or CFO. Our program is unique in how we work with the existing CFO and allows for true on-the-job training and shadowing.

With our coaching and mentoring support, we emphasize the transition from being a technical expert to becoming a business leader, partner, and advisor. We have worked with CFOs and senior finance leaders who, just like you, needed an experienced, friendly and non-judgmental voice to get them to the other side of the financial spectrum.

Being at the top is lonely not just for the CEO but also for the CFO. Professional development for CFOs is typically geared towards the compliance side of finance.

This is a great opportunity for you to augment your CFO’s capabilities and offer this customized in-house and hands-on approach over a short period and get an important strategic program completed.

The NSS program incorporates a skill-set matrix methodology and an in-depth evaluation of your finance department’s capabilities. Both are critical components if your CFO is going to become a more active partner in the growth of your business.

Our well received coaching incorporates the project objectives, expectations and timeline with you and the executive team and is executed by the CFO with the assistance of an experienced NSS Growth Advisor with over 30+ years’ experience.

Please watch our Rudi Tuesday on Mentorship and give us a call to discuss our Coaching and Mentoring support further.

RudiTuesday Mentor

We are the only peer-to peer CFO group out there helping CFOs become more strategic and forward-looking. We work in a non-threatening, collegial way and are result driven to help your CFO be an effective partner to you and your business.

Staying status quo is not an option. If your incumbent CFO or Head of Finance cannot give you the decision-making support you need to grow and keep a competitive edge, then you are compromising the value of your business.

Call Bob Weber, Managing Director at NSS at 617. 449. 7728. He oversees the NSS Coaching and Mentoring program.

Meet the New NSS Team

INTRODUCTION TO SOME NEW FOLKS

We have been busy and making some positive changes at NSS.

  • We moved to our new HQ in Burlington in January
  • We launched our new website in March
  • We expanded our core team this Spring

Click on the short videos below to be introduced to each of our core team members.  Enjoy and Share with any CEO and Business Owner who would benefit from meeting us!

CONTACT US TODAY!  WE ARE READY TO HELP TURN YOUR CHALLENGES OF TODAY  INTO OPPORTUNITIES FOR TOMORROW.  CALL ANY OF US AT 617-449-7728

pARTNERSHIP

What Does Your Gut Tell You?

Plotting Out a Roadmap | What Does Your Gut Tell You?

Many mid-market company owners and operators trust their intuitive senses —or “gut instincts” — to help navigate issues as they arise. Deloitte Development, 2012

What Does Your Gut Tell You?

Understanding where you are today with your business, both on a qualitative (gut) and quantitative basis (backed by well-defined business analytics), is essential in plotting a roadmap to where you want to take your business.

Capturing your present state will empower you to make the changes necessary to move your business forward.

  • Have you conducted a competitive landscape analysis lately?
  • What are your key strengths and weaknesses?  How have they changed?
  • Are your scarce internal resources holding you back from making the changes necessary to sustain profitability? Should you be making some changes in who you need on the bus moving forward?
  • Have you considered alternatives to achieving growth or maximizing the value of your business?
  • Are your business systems and processes aligned with your customers’ needs?  When was the last time you took inventory of your processes?

Your answers to these questions may tell your gut that it is time to take action. The process begins by acknowledging that you want to make a change.

Once you get a pulse of where you are positioned in the marketplace, you then can analyze and evaluate your opportunities by creating a roadmap that will get you there. Whether you decide to maintain status quo, consider alternatives like acquisitions, partnerships or product diversification, or plan for a future sale of your business, you want to be in a position to make optimal decisions based on rigorous quantitative and qualitative analyses, not just gut instincts.

Ready to Analyze Your Opportunities?

Next Stage Solutions partners with you. We take you (owner) through an intensive one-day work out, where we leave no stone unturned.  The process we use has helped dozens of companies identify key opportunities. By focusing on 3-5 initiatives during the workshop, we assist you in creating a plan for immediate implementation.  The benefit of this workshop is that it is designed just for you.

Call us for more details at 617-449-7728

Additional Resources | RudiTuesday Video on Benchmarking

NSS Announces Workshops

NSS Announces CEO Event Series & Workshops

Next Stage Solutions (NSS), your partner in profitable growth, is hosting several informational and educational events and this year and we are collaborating with some great folks to give you an even a better experience.

For the past five years we have gained confidence of CEOs and Business Owners in providing quality business insight through high-impact workshop discussions. Their continued feedback and repeat attendance at these events have confirmed the value of our efforts. THANK YOU!

We continue to focus on the midmarket business challenges and opportunities.  We partner with our clients and client prospects in identifying optimum solutions to guide them to their next stage. This experience allows us to tailor our interactive discussions in a more meaningful way for your benefit.

All events are highly relevant to CEOs and Business Owners of midmarket companies (25+ employees and $5M in annual revenue).

Not a CEO or Business Owner, please contact our office directly.  We offer you a seat for certain, if you bring a CEO or Business Owner who fits our target market.  We thank you in advance for your understanding. 

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Tuesday Feb 24th | 5pm – 8pm | Waltham

What Keeps You Up at Night? Interworkings of Working Capital

Our discussion will focus on understanding the need and mastering the management of the Working Capital for your company.  We will discuss the methods and best practices of budgeting and monitoring company’s capital resources.

To register contact Rudi at 617-449-7728 or info@nextstagesolutions.com

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Thursday March 5 | 10:30am – 12:30pm | Waltham | 3-part Series on Nonlinear Growth

Achieving Nonlinear Growth in Academia: Lessons for your Company

In this series we will learn from masters of nonlinear growth.  Join us and Dr. Chris Hopey, President of Merrimack College in an interactive workshop for CEOs and Business Owners interested in alternative and different ways to grow. We promise a nonlinear experience!

Limited Seating | For more information and Registration, click HERE

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Thursday March 19 | 8:000am – 4:30pm | Waltham | Special Rate Available

2015 XPX Summit: The Progression of Succession

Good leadership and a robust culture will start the Summit with great Keynote speakers. Growing business value towards an eventual exit will be the focus of our CEO panelists and moderators. We will talk about the ability to scale and operate efficiently to planning a succession.  Gather insights from seasoned CEOs and Advisors.

NSS offers a special rate to CEOS and Business Owners. Call Rudi at  617-449-7728

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Register Today!   All the workshops are free or with a nominal fee to cover our costs.

NSS MOVED to NEW HEADQUARTERS!

67 South Bedford Street, Suite 400 West, Burlington, MA 01803 | Come and Visit us!!

Not All Growth is Good Growth

How Can I Grow Profitably AND Add Value to My Business?


NSS CEO Workshop | Wed,  Nov 5, 2014

10:30am – 12:30pm with light lunch

Bay Colony Office Park, 950 Winter Street, Waltham, MA 02451

REGISTER TODAY!

Not all Growth is Good Growth! Join an expert panel to learn how you can drive your company’s growth.  The CEOs will talk about their own experience and the experts will bring an outside perspective of what makes a business more valuable over another.

Speakers:

Moderator: Laurie Kirk, CEO of The Board Forum

A sample of questions we will address:

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    MicrosoftInternetExplorer4 What type of Finance Leadership do you need to Champion Strategic Objectives?
  • What are the Differences in Value Creation both Short & Long term?
  • How do you Mitigate Risks and Reduce your Cost of Capital?
  • How do you Promote Operational Excellence across your Organization that Generates a Strong EBITDA?

Sponsors:



NSS CEO Workshops are part of our continuing series of educational forums where CEOs participate in peer-to-peer exchanges of ideas and thought leadership. Professional Advisors may attend WITH a CEO or call the office.

 

Looking for Growth Strategies?  Contact Next Stage Solutions to Start a Conversation! http://www.nextstagesolutions.com  617.449.7728

 

KPI’s Point in the Right Direction!

Why You Need to Think about the ‘Elastic Bands’ inside your Business. How KPI’s can Point your Team in the Right Direction!

By Paul Latham, CEO of In-Cube-8 LLC | www.in-cube-8.com

I have previously highlighted (see my blog dated April 29th, 2014) how the concept of ‘elephant sandwiches’ can be used to help educate the team and drive the implementation of long-term strategic change.

However, teams will not thrive and survive on ‘elephant sandwiches’ alone! They need to be pointed in the right direction – they need the right ‘elastic bands’ in place!

‘Elastic bands’ refer to those processes established inside a business that drive consistent team behavior. The key component of those ‘elastic bands’ are known as KPI’s – the measurements used by a business to ensure that a particular process has been followed / is working properly.

Ultimately those measurements should lead us towards evaluating our business (or individual) performance. What are our definitions of success?

Let’s look more carefully at ‘elastic bands’

Most businesses measure things (often for long forgotten historical reasons). What is not (often) understood is that whatever you measure will influence team behavior (both for good or bad). This is the flip side of ‘what you measure you can manage’.

In the example illustrated (above) we are measuring ‘X’ and ‘Y’. Everybody knows they are measured (by the boss) – so they must be ‘important’. ‘X’ and ‘Y’ strongly influence team behavior. They create a ‘line of tension’ (just like an elastic band).

Now say the boss also wants to concentrate on ‘Z’ (in the illustration). ‘Z’ is not measured – it’s something considered to be ‘difficult to measure’ (e.g. ‘establish customer needs first’).

What typically happens is that while the boss is watching that team member – they will do ‘Z’. They stretch the line of tension (see red dotted line in illustration) to ‘Z’.

However, sooner or later the boss looks away (attention is diverted). Unless ‘Z’ is measured (as a KPI) what will normally happen is that team behavior will revert to the norm (the ‘X’ – ‘Y’ line of tension) and ‘Z’ will not happen (consistently or properly).

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To overcome this, business owners must decide what matters inside their business (definitions of success), and think about what team members should be doing – and then measure them (establish KPI’s).

In this way they create new ‘elastic bands’. Perhaps ‘X’ and ‘Y” are no longer relevant to the way we do business today? Perhaps we should be measuring something completely different, for example, ‘A’ – ‘G’ in the illustration above.

In which case ‘A’ through ‘G’ are what we should be measuring. They are our KPI’s. and they point our team in the right direction. They point the team towards their definitions of success (in the illustration):

  • Follow the process
  • Generate revenues
  • Delight the customer

You need to really think about the existing ‘elastic bands’ inside your business. Think about your definitions of success and use the right KPI’s to point your team in the right direction.

By Paul Latham, CEO of In-Cube-8 LLC | www.in-cube-8.com

New Standards for Revenue Recognition

Revenue Recognition Principles promulgated in 2014

By Derek A. Smith, Managing Director, Next Stage Solutions, Inc | smith@nextstagesolutions.com

The Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board (“IASB”) have at long last completed their deliberations on the establishment of revenue recognition principles that are common wherever US GAAP and International Financial Reporting Standards (“IFRS”) are applied. The new standard was issued on Wednesday, May 28, 2014 and will be effective for fiscal years beginning after December 15, 2016 for public companies and December 15, 2017 for private companies. Entities will have the option to apply the standard retrospectively or to adjust opening retained earnings for the cumulative effect of accounting for contracts that are not completed under legacy GAAP at the adoption date.

Implementation of the new standard will mark a big change for many companies in the United States today. It is estimated that there are more than 200 pieces of authoritative literature that create industry-specific rules for revenue recognition including ASC 985-605, Software: Revenue Recognition; ASC 605-35, Revenue Recognition: Construction-Type and Production-Type Contracts; and ASC 932-605 Extractive Activities – Oil and Gas: Revenue Recognition. These will all be replaced by the new standard. In the press release announcing the new standard FASB Chairman Russell Golden stated “It will eliminate a major source of inconsistency in GAAP, which currently consists of numerous disparate, industry-specific pieces of revenue recognition guidance.”

 

Why you want to start sooner rather than later

While the launch date may seem far off, companies and their management teams need to understand that systems and processes are going to need adjustment to satisfy the new guidelines. It is not appropriate to use an Excel spreadsheet to track the reporting obligations. Further, for any company that provides comparative financial statements, the results for the earlier periods will need to be recalibrated if the company applies the standard retrospectively. Public companies have to provide three years of comparative Statements of Activities.

 

What is the new Standard?

The core principle of the new standard is that “an entity shall recognize revenue that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services”. While there are some exceptions, the standard will apply to most transactions with customers.

The New Standard in 5 Steps

The new standard has five steps an entity must take in determining the recognition of revenue. They are as follows:

1. There must be a contract (either oral or written) with the customer;

2. The contract must spell out the separate performance obligations;

3. The transaction price must be determinable;

4. The transaction price must be allocable to the separate performance obligations in the contract; and

5. Individual performance obligation revenue will be recognized upon satisfaction of the individual performance obligation.

1. Contract with a Customer

A contract must have commercial substance; the parties are committed to perform their respective obligations; each of the parties can identify their rights regarding the goods or services to be transferred; and the entity providing the goods or services can identify the payment
terms for effecting the transfer. The standard addresses contract modifications and add-on obligations.

2. Separate Performance Obligations

The final standard will provide specific guidance on evaluating the goods and services in a contract to identify each separate performance obligation. While the final standard will not define goods or services, it will provide several examples including goods produced for sale, granting a license, and performing contractual acts. A good or service will represent a separate performance obligation if it meets both of the following criteria:

(i) It is capable of being distinct (that is, the customer can benefit from the good or service on its own or with other readily available resources); and

(ii) It is distinct in the context of the contract (that is, it is not highly dependent or highly interrelated with other promised goods or services).

The final standard will include other indicators (or similar indicators) of whether a good or service is distinct in the context of the contract.

3. Transaction Price

The third step in applying the new standard is to determine the transaction price. That is, an entity must determine the amount of consideration to which it expects to be entitled in exchange for the promised goods or services in the contract. The transaction price can be a fixed amount or can vary because of discounts, rebates, refunds, credits, incentives, performance bonuses/penalties, contingencies, price concessions, outcome-based fees, or other similar items. Under this model, an entity would estimate the transaction price by considering the effect of variable consideration, the time value of money (if a significant financing component is deemed to exist), noncash consideration, and consideration payable to the customer. Entities would use a probability-weighted approach to estimate a transaction price that is subject to variability (expected value) or an approach based on the single most likely amount, whichever is more predictive of the amount to which the entity would be entitled.

Note: Contingent consideration would only be included in the transaction price when an entity has a “high level of certainty” that the amount of revenue to be recognized would not be subject to future reversals.

4. Allocating the Transaction Price

Next, the entity must allocate the transaction price to the separate performance obligations. When a contract contains more than one separate performance obligation, an entity would allocate the transaction price to each separate performance obligation on a relative stand-alone selling price basis (with certain limited exceptions). The standard will note that the best evidence of stand-alone selling price is the price at which the good or service is sold separately by the entity. If the good or service is not sold separately, an entity will be required to estimate it by using an approach that maximizes the use of observable inputs. Acceptable estimation methods will include, but are not limited to, expected cost plus a margin, adjusted market assessment, and a residual approach (when the selling price is highly variable or uncertain).

5. Recognition of Revenue

The fifth and final step in the model is to recognize revenue when (or as) each separate performance obligation is satisfied. A performance obligation is deemed satisfied when control of the underlying goods or services (the “assets”) for the particular performance obligation is transferred to the customer. “Control” is defined under the proposed model as “the ability to direct the use of and obtain substantially all of the remaining benefits from the asset” underlying the good or service. In applying the proposed model, an entity will first evaluate whether control of a good or service is transferred over time. A performance obligation is deemed to be satisfied over time (i.e., control of the good or service is transferred over time) when at least one of the following is met:

• The entity’s performance creates or enhances an asset (for example, work in process) that the customer controls as the asset is created or enhanced.

• The customer receives and consumes the benefits of the entity’s performance as the entity performs, and another entity would not need to substantially reperform the work the entity has completed to date.

• The entity’s performance does not create an asset with an alternative use to the entity and the entity has a “right to payment for performance completed to date.”

If any of the criteria are met, an entity would be required to recognize revenue over time as control of the goods or services is transferred to the customer. In such case, an entity would recognize revenue by measuring progress toward satisfying the performance obligation in a manner that best depicts the transfer of goods or services to the customer. The standard will provide specific guidance on measuring progress toward completion, including the use and application of output and input methods.

Note: There is no reference to collectability of the revenue as currently exists in US GAAP. While there has to be a reasonable expectation of collectability the new standard does not impose a threshold such as “reasonably assured”. The standard setters have stated that any provision for bad debts must be prominently disclosed within operating expenses.

Major Changes to Consider

· Affects both Public and Private companies

· Must run parallel accounting systems for at least 2 years( private companies) and 3 years (public companies)

· New standard is Principled based not Rules based

· There is an opportunity for Judgment

Other Considerations

As with any new standard, there are other items to consider in implementing the standard. They include the required disclosures to be included in the financial statements (hint: they are onerous), and for US companies the impact on accounting for income tax obligations. For example, the Internal Revenue Code addresses advance payments for goods and services and income from long-term contracts. Entities will need to evaluate how the new revenue recognition principles reconcile with income for tax purposes.

Next Steps

For further information, please don’t hesitate to contact your Next Stage Solutions partner. It is not too soon to begin addressing the accounting and operational processes required to be modified to be in compliance with the new standard.