ASC 606- The Early Results are In!

ASC 606, the long awaited and much debated new accounting standard for revenue recognition in the United States has now become reality for most public companies.  Adoption of this new standard was required for calendar-year public companies effective January 1, 2018, and the results of adoption have now become public with the earnings releases and 10-Q filings for the first quarter ending March 31, 2018.

This standard has created much pain for some industries and has been essentially a non-event for others.  Early results have not generated huge surprises but many companies have clearly been impacted.  Based on a small survey of filings thus far, here are some trends:


67 % of companies adopting reported no material impact, and those with a material impact tended to result from earlier recognition of variable consideration, or from contract segmenting issues.


40% reported increased revenues, 33% reported decreased revenues, and the remaining 27% reported no material impact.  Effectively, most companies had to revise some form of their historical revenue recognition, either by accelerating, deferring, or re-characterizing certain of their revenues.


Nearly identical results as Technology, with most companies reporting meaningful changes in both directions.

Real Estate

60% reported no material impact, and those who did report material impacts generally related to accelerated real estate commission and other fee recognition under the new rules.


As expected, most manufacturing companies (>80%) reported no material impact upon adoption.


The big change in the restaurant space related to deferral of initial franchise fees for franchisors, with 45% reporting a material change for this matter alone.

Finally, the vast majority of companies used the modified retrospective method of adoption, which enables companies to only prospectively show results under the new rules, as opposed to restating previous years.

“The results we are seeing are in line with what we expected, although there may still be some headlines associated with the results of the SEC’s initial reviews of companies’ adoption impacts and disclosures. It is really important to keep in perspective the fact that over time, the actual revenues collected from customers does not change, nor do the costs to generate those revenues, so this is really about the timing of when those items receive accounting recognition” stated Michael Dukes, Partner in Bennett Thrasher’s Financial Reporting and Assurance group.

Contact Us

For more information on ASC 606, please contact Michael Dukes by calling 770.396.2200.