Opportune, Weaver Host Joint Informational Seminar on Technical Reporting Issues
Subject matter experts from Opportune LLP and Weaver hosted a joint informational session at the Petroleum Club in Midland, Texas to discuss new tax reporting issues, such as revenue and lease implementation, tax reform updates and IPO planning and considerations that are sure to impact participants and stakeholders in energy and non-energy sectors.
Kristin Floyd Newton and Sandy Dhariwal, Managers with Opportune’s Complex Financial Reporting group, will provide an overview of perhaps two of the most significant step changes in tax and GAAP reporting affecting the energy and non-energy sectors: the new revenue recognition standard (ASC 606) and the lease accounting standard (ASC 842).
ASC 606 represents one of the most significant changes to GAAP in recent years. It affects all entities – public and private – that generate revenue from contracts with customers. Opportune LLP offers tailored and efficient implementation services that enable its clients to assess the impact of and comply with ASC 606.
Currently, GAAP revenue recognition standards vary by industry and may result in different accounting treatments for similar transactions across industries. The goal of principles-based accounting is to reduce the number of specific rules and, thus, may make the determination and consistency of accounting across industries more difficult.
The standard went into effect for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within that year. All other entities will need to adopt the standard for annual reporting periods beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 15, 2019.
Meanwhile, ASC 842 will have a significant impact on how businesses manage, account for and report substantially all leases, including equipment and real estate. ASC 842 will require organizations who lease assets— referred to as "lessees”—to recognize, on their balance sheet, the assets and liabilities for the rights and obligations created by those leases with terms greater than one year.
Specifically, ASC 842 will impact:
- New processes;
- Upgrading technology;
- More detailed reporting requirements; and
- Technical accounting assessments
ASC 842 will require public companies to include all leases with terms greater than one year on their balance sheet for annual and interim reporting periods beginning after December 15, 2018 (Effective Date). The private company Effective Date provides a one-year deferral, December 15, 2019, for annual reporting periods and interim periods the following year. Early adoption is also permitted for all entities.
In addition, Amy Stutzman, Managing Director with Opportune’s Complex Financial Reporting group, will provide an overview of the 2018 IPO market, recent legislation affecting the market, S-1 preparation, best practices and highlight recent SEC comments.