Canton, MA, April 07, 2017 --(PR.com
)-- SOFTRAX, the world's leading provider of revenue recognition software, today announced significantly enhanced support for managing ASC 606 guidance related to the newly introduced “Significant Financing Component” concept. This enhancement enables clients to manage complex reporting of the Time Value of Money (TVM) pursuant to the guidance.
Under the new revenue recognition guidance, ASC 606 and IFRS 15, when there is a significant financing component in a contract, companies must adjust the transaction price to account for TVM. These adjustments must be managed throughout the life of a contract, and possibly through multiple post-processing events. The math involved becomes extremely complicated over time. Very few existing systems on the market can handle this.
The enhanced TVM enhancement was developed in cooperation with Tony Sondhi, one of the world’s top revenue recognition experts and the founder of A. C. of Sondhi & Associates, LLC. TVM extends the power of Revenue Manager, empowering finance and accounting teams with the tools they need to automatically apply and manage specific interest, and ensuring full coverage for ASC 606 and IFRS 15.
The terms of the contract may require finance teams to calculate the Time Value of Money based on either or both of two methods: “Payment In Advance” also known as Future Value accounting or FV and “Payment In Arrears” or Net Present Value accounting or NPV. Importantly, the enhanced TVM functionality automates the proper accounting through a wide variety of post-processing scenarios, including cancellations, contract combinations, contract modifications and more. Ultimately, Revenue Manager generates journal entries with amounts to Deferred Revenue, Interest Income, and Interest Expense GL accounts.
“It was a pleasure working with the SOFTRAX team on this complex and important feature. As companies implement and subsequently apply ASC 606, their auditors will enforce the requirement to consider the Time Value of Money in contracts that contain significant financing components,” said Tony Sondhi of Sondhi & Associates.
“Time Value of Money accounting can be extremely complicated, particularly through multiple post-processing events. We are extremely proud of the automation we have built into our revenue recognition software in cooperation with our long-time partner, Tony Sondhi,” said Tom Zauli, SVP & General Manager of SOFTRAX.
About A. C. Sondhi & Associates
Ashwinpaul (Tony) C. Sondhi, President, A. C. Sondhi & Associates, LLC, is currently a member of the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board (FASB). He served on its 2009 Working Group on EITF 09-3, its 2009 Disclosure Working Group on EITF 08-1, and its 2008 Working Group on EITF 08-1 and is a member of the 2016 FASB Working Group on Customers’ Accounting for Implementation Fees in Hosting Arrangements. He is also a member of the Investor Advisory Group of the Public Company Accounting Oversight Board (PCAOB) and serves as the chairman of the Corporate Disclosure Policy Council of CFA Institute. He has served as a member of the 2008 Expert Advisory Panel on Fair Value of the International Accounting Standards Board (IASB). He has been a member of the Accounting Standards Executive Committee (AcSEC) of the AICPA and the Planning Subcommittee of the AcSEC; Mr. Sondhi is currently helping clients implement ASC 606 http://www.acsondhi.com
For over 17 years Softrax has pioneered the market with revenue management software to offer an array of functions and features to support the current and new revenue recognition guidelines. Companies can regain control and implement the new revenue recognition standard with confidence. Our solutions seamlessly augment ERP and financial systems to support existing and coming revenue guidance, reduce operating expenses, and gain unprecedented visibility into business performance. To learn more about Revenue Manager please contact SOFTRAX at 972-715-4028 or visit www.softrax.com