Revenue Recognition Changes Pub

8/3/2019 Revenue Recognition Changes Pub

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Financial Executives Research Foundation| 1

Revenue recognition, like lease accounting, is a priority project thatis part of the convergence efforts of the Financial AccountingStandards Board (FASB) and the International Accounting StandardsBoard (IASB) (the boards"). On June 24, 2010, the boards jointlyissued an exposure draft titled Revenue from Contracts withCustomersthat proposes a new revenue recognition standard whichcould significantly affect current revenue recognition policies formany companies. When the comment period for this exposure draft

ended on October 22, 2010, over 960 comment letters were receivedand the boards have commenced re-deliberations on certainaspects, making some changes to what was proposed in theexposure draft.

This Issue Alert reflects changes made through February 2, 2011.More changes are expected as a result of the re-deliberations to becompleted during the second quarter of 2011. A final revenuestandard is expected to be issued in the second quarter of 2011. Aneffective date has not yet been determined.

What should companies be doing now?

Inventory existing sales agreements and related accountingpolicies and perform an assessment to determine the impactsof the proposed standard to your company. A sample self-assessment, Initial Revenue Recognition DiscussionQuestionnaire, is provided on page 11.

Consider impact on strategic business initiatives such aschanges in bundling, pricing, go-to-market strategy, newproduct and service offerings.

Consider impact of the new rules upon related companyprocesses and compensation plans.

Evaluate existing IT systems and discuss with technologyproviders to assess the systems current capabilities andwhether upgrades are necessary and available.

Begin to assess what data will need to be collected andanalyzed prior to adoption to allow for comparativepresentation.

Establish a training and communication plan.

Are You Ready for the ProposedChanges to Revenue Recognition?

By Jim Kaiser, Denise Cutrone, Ramon Scheffer and Richard Cebula,PricewaterhouseCoopers, LLP

Issue Alert February 16, 2011
http://www.fasb.org/cs/ContentServer?c=FASBContent_C&pagename=FASB%2FFASBContent_C%2FProjectUpdatePage&cid=900000011146http://www.fasb.org/cs/ContentServer?c=FASBContent_C&pagename=FASB%2FFASBContent_C%2FProjectUpdatePage&cid=900000011146http://www.fasb.org/cs/ContentServer?c=FASBContent_C&pagename=FASB%2FFASBContent_C%2FProjectUpdatePage&cid=900000011146http://www.fasb.org/cs/ContentServer?c=FASBContent_C&pagename=FASB%2FFASBContent_C%2FProjectUpdatePage&cid=900000011146http://www.fasb.org/cs/ContentServer?c=FASBContent_C&pagename=FASB%2FFASBContent_C%2FProjectUpdatePage&cid=900000011146


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|Financial Executives Research Foundation2

Overview of the Proposed Standard

The boards' objective in issuing a converged standard is to increase the consistency ofrevenue recognition for similar contracts, regardless of industry. The boards noted that

existing guidance under U.S. generally accepted accounting principles (U.S. GAAP) may, insome cases, provide different revenue recognition models for contracts with similareconomic characteristics. Existing International Financial Reporting Standards (IFRS)contain less guidance than U.S. GAAP on revenue recognition, and the boards noted it issometimes difficult to apply beyond simple transactions, leading to diversity in practice. Theproposed standard will represent a significant shift in how revenue is recognized in certaincircumstances. It moves away from specific measurement and recognition thresholds andremoves industry-specific guidance. Therefore, the proposed standard is likely to have amore significant effect on some industries than others. The most significantly impactedindustries are expected to include:

Automotive

Engineering & Construction Entertainment & Media Healthcare Industrial Products & Manufacturing Pharmaceutical & Life Sciences Retail & Consumer Technology Telecommunications Transportation & Logistics

The proposed standard is a single, contract-based approach in which revenue is recognizedwhen an entity satisfies its obligations to its customers, which occurs when control over agood or service is transferred to the customer. Compared to current practice, revenue andcost recognition might change as it relates to the timing and the amount recognized.

The proposed revenue recognition guidance will affect some companies more than others,although all companies should expect some level of change. The boards have identified thefollowing areas which may be significantly affected:

Recognition of revenue based solely on the transfer of goods or services - contractsfor the development of an asset (for example, construction, manufacturing, andcustomized software) would result in continuous revenue recognition only if thecustomer controls the asset as it is developed.

Identification of separate performance obligations - an entity would be required todivide a contract into separate performance obligations for goods or services that are

distinct and are delivered at different times. As a result of those requirements, anentity might separate a contract into units of accounting that differ from thoseidentified in current practice.

Licensing and rights to use - an entity would be required to evaluate whether alicense to use the entitys intellectual property(for less than the propertys economiclife) is granted on an exclusive or nonexclusive basis. If a license is granted on anexclusive basis (for less than the property's economic life), an entity would berequired to recognize revenue over the term of the license. That pattern of revenuerecognition might differ from current practice.


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Effect of credit risk - in contrast to some existing standards and practices, the effectof a customers credit risk (that is, collectibility) would affect how muchrevenue anentity recognizes rather than whetheran entity recognizes revenue.

Increased use of estimates - in determining the transaction price (for example,estimating variable consideration) and allocating the transaction price on the basis ofstandalone selling prices, an entity would be required to use estimates more

extensively than in applying existing standards. Accounting for contract-related costs - the proposed guidance specifies which

contract costs an entity would recognize as expenses when incurred and which costsmay be capitalized because they give rise to an asset. Applying that cost guidancemight change how an entity accounts for some costs.

The proposed standard requires full retrospective application, including application to thosecontracts that do not affect current or future periods, but affect reported historical periods.The boards have not decided on the effective date for the proposed standard, but they havediscussed possible effective dates no earlier than 2014 to provide management adequatetime to prepare for and implement the proposed standard. In October 2010, the boardsissued a discussion paper seeking feedback about the time and effort involved in adopting a

number of proposed accounting standards. As part of this outreach effort, the FASB isparticularly interested in obtaining views on effective dates and transition methods. TheFASB said that it will use the feedback it receives to develop implementation plans to helpcompanies manage the pace and cost of change, including implementation of the proposedrevenue standard.

The proposed standard may have broad implications for an entity's processes and controls.Management may need to adapt their existing IT systems and internal controls in order tocapture information to comply with the proposed guidance. Therefore, companies shouldbegin assessing the implications of the proposal on existing contracts, technology andprocesses.


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The Key Provisions

Performance ObligationsUnder the proposed model, revenue is recognized upon the satisfaction of an entity's

obligations to its customers (performance obligations). The proposal defines aperformance obligation as an enforceable promise in the contract that includes bothexplicit and implicit promises to transfer goods and/or services to a customer. Performanceobligations are considered to be satisfied when controlof a good or service transfers to thecustomer, which is when the customer is able to use, and receive benefits from, the good orservice.

Identifying the performance obligations in a contract will be critical in applying the proposedmodel and will require significant judgment. This may be particularly challenging for servicearrangements and long-term contracts. Also challenging will be determining whenperformance obligations should be combined and when they should be separated.

Generally, the identification of separate performance obligations under the proposed modelwhich might have been accounted for as one unit of accounting under the current rules orseparated into individual deliverables differently, might impact the timing and the amount ofrevenue recognition and corresponding margins. This might have a significant impact ifcontrol transfer occurs at different times compared to when revenue is recognized under thecurrent guidance. Control transfer is further determined based on a non-exhaustive list ofindicators, giving companies the ability to better reflect the economics of their revenuetransactions. The following industries could be impacted as follows:

In the Automotive industry, tooling arrangements might be impacted because suppliersgenerally account for these as one unit of accounting under existing guidance, with revenuerecognized for the tooling and output from the tool as parts are delivered by the supplier tothe original equipment manufacturer (OEM). Under the proposed guidance, the tooling andoutput from the tool are likely to be two separate performance obligations, resulting in earlierrevenue recognition than under existing guidance. Revenue for the tooling is likely to berecognized before the transfer of parts if control of the tooling transfers to the OEM prior tothe transfer of outputs derived from the tooling.

In the Engineering & Construction industry, under current guidance, contractors oftenaccount for each contract at the contract level the macro-promise to build a road forexample, as one unit of accounting. The proposed guidance could potentially require theseparation of such a contract into multiple performance obligations related to clearing,grading, and paving, for example, resulting in revenue and margins specific to theseperformance obligations to be recognized separately when control transfers to the customer.Under current guidance, companies in the Engineering & Construction industryrecognize revenue using the percentage-of-completion method when reliable estimates areavailable, which might be at different times when compared to when control transferscontinuously, as defined in the proposed standard. The gross profit method to determinerevenue and gross profit will no longer be allowed only the Revenue method is to be used.Many Industrial Products & Manufacturing companiesand someTelecom entitieshavecontracts where they provide a service (installation or customization) along with theirproducts and therefore, are expected to be impacted similarly.


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In the Entertainment & Media industry, video game developers will need to determinewhether the video game and additional services (such as online services and multiplayerfunctionality) should be accounted for as separate performance obligations under theproposed standard, leading to different timing of revenue recognition compared to currentguidance. Currently, video game developers might be required to recognize revenue for thegame and additional services together over the service period.

Advertisers in the Entertainment & Media industry, will need to assess whetheradvertising contracts include more than one performance obligation (for each type ofplacement) to be accounted for separately as the proposed standard is less restrictive thancurrent guidance related to identifying multiple deliverables.

In the Industrial Products & Manufacturing as well as the Pharmaceutical & LifeSciences industry, revenue related to bill and hold arrangements might be recognizedearlier when compared to current guidance because a fixed delivery schedule is no longernecessary in order to recognize revenue.

Research services, joint steering committee participation and FDA submission in

collaboration and licensing arrangements, commonly used in the Pharmaceutical & LifeSciences industry, might be separate performance obligations under the proposedstandard, recognized when control transfers to the customer which could be different fromthe current guidance.

Customer loyalty programs used in the Retail & Consumeras well as the Transportation& Logistics (primarily airlines) industry, are considered separate performance obligationsunder the proposed standard. Revenue will be allocated to the points and recognizedseparately when points are redeemed and control of the goods or services has transferredto the customer or when such points expire. The commonly used incremental cost modelunder current guidance will no longer be allowed. Breakage is considered in the allocation ofrevenue to the separate performance obligations for both loyalty programs and gift cards,

which is expected to eliminate the current diversity in practice.

Technology companies will need to assess whether contracts include multipleperformance obligations (such as hardware, extended maintenance and other serviceelements) which is done on a less restrictive basis when compared to current guidance.Therefore, potentially more performance obligations will be accounted for separately,impacting the timing of revenue recognition.

Telecom entities regularly enter into contracts with customers that bundle the sale oftelecom services, activation/connection services, and equipment (for example, handsets,modems, etc.) which might not constitute a separate performance obligation under thecurrent guidance. This change may impact the timing and amounts of revenue and margin

to be recognized. In addition, the proposed standard might accelerate the timing of revenuerecognition for U.S. entities to the delivery date or publication date for hard copypublications (such as periodicals and phone directories) the date on which theperformance obligation is satisfied.


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Transaction PriceThe boards are proposing that revenue be measured based on the transaction price,which is the amount the customer promises to pay in exchange for goods or services. Thetransaction price may be easy to determine when it is a fixed amount of cash at the time ofsale. However, it may be more difficult to determine if the consideration varies depending

on the resolution of an uncertainty or when the transaction price is affected by the time valueof money.

In what is a fundamental shift from most current practices, the transaction price will includevariable or contingent consideration when such amounts can be reasonably estimated. Inthose cases, the transaction price is measured using a probability-weighted estimate of theconsideration expected to be received. The transaction price should also reflect thecustomer's credit risk by recognizing only a probability-weighted estimate of the expectedreceipts and the impact of the time value of money, when material. The proposal will requiregreater use of estimates than under existing guidance.

All industries are expected to be impacted to a varying extent by the requirement to reflect

the customers credit risk or collectability by recording revenue based on a probability-weighted estimate of the expected receipts. For most companies, current guidance requiresrevenue to be recognized when payment is reasonably assured (or probable). Ascollectability is no longer a recognition threshold, revenue may be recognized earlier thancurrent practice. Collectability affects the measurement of revenue under the proposedstandard, as credit risk is reflected as a reduction of the transaction price at contractinception rather than as bad debt expense. Subsequent changes to the assessment ofcollectability will be recognized as income or expense, rather than as revenue, leading tochanges in the geography on the income statement that could significantly impact the top-line as well as reported margins.

The proposed model requires the transaction price to be allocated to performance

obligations based on relative standalone selling prices. Other allocation methods usedunder existing guidance will not be allowed. The best evidence of the standalone sellingprice is the price of a good or service when the entity sells it separately. The selling price isestimated if a standalone selling price is not available.

As indicated above, a number of industries are expected to be impacted by the requirementto identify and separate performance obligations. Similarly, they are also expected to beimpacted by the requirement to allocate the transaction price in a contract to theperformance obligations using relative standalone selling prices. Many companies in theEngineering & Construction, Industrial Products & Manufacturing, Pharmaceutical &Life Sciences, and Retail & Consumer industries may experience a significant changewhen allocating revenue to individual units of accounting in a single contract as well as

having to estimate the standalone selling prices. Most companies in the Automotive,Entertainment & Media, Technology, Telecommunications, and Transportation &Logisticsindustries may not experience a significant change in practice in accounting formultiple-element arrangements. The elimination of the residual method is expected tospecifically impact the Software industry, potentially leading to earlier revenue recognition.

After the inception of the contract, performance obligations are not re-measured unless thetransaction price changes. For example, estimates of the transaction price could changeparticularly when there is variable consideration. Variable consideration that management


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can estimate reasonably is recognized in revenue at the probability-weighted amount.Currently, variable or contingent consideration is not recognized until the contingencylapses. Therefore, entities might recognize revenue earlier and at a different amountcompared to existing guidance. Variable consideration is most commonly applicable tocompanies in Engineering & Construction (awards, incentive payments, claims),Entertainment & Media (royalties), Healthcare (Medicare / Medicaid), Industrial

Products & Manufacturing (volume rebates), Pharmaceutical & Life Sciences(milestone payments and royalties), Technology (royalties and discounts),Telecommunications (rebates and refunds) and Transportation & Logistics (volumediscounts).

The proposed model requires an on-going assessment of the costs expected to be incurredto satisfy outstanding performance obligations. If the direct costs expected to be incurredexceed the allocated transaction price related to a performance obligation, a loss isrecorded immediately. Companies in the Engineering and Construction, Healthcare,Technology, Entertainment and Media, and Transportation and Logistics industriesare expected to be impacted by the requirement to assess losses at the performanceobligation level. This change may lead to companies recognizing losses that would not have

been recognized under current guidance.

Product WarrantiesWarranties are common in the Automotive, Engineering & Construction, IndustrialProducts & Manufacturing, Pharmaceutical & Life Sciences, Retail & Consumer andTechnology industries. If a customer has the option to purchase a warranty separatelyfrom the entity, the entity should account for the warranty as a separate performanceobligation. That is, the entity would allocate revenue to the warranty service. If a customerdoes not have the option to purchase a warranty separately from the entity, the entity shouldaccount for the warranty as a cost accrual unless the warranty provides a service to thecustomer in addition to assurance that the entitys past performance was as specified in thecontract (in which case the entity would account for the warranty service as a separate

performance obligation).

LicensesThe timing of revenue recognition for licenses of intangible assets is based on whether thelicense is exclusive, and whether or not the license is for the entire economic life of theasset. If the license is non-exclusive or for substantially all of the economic life of the asset,related revenue is recognized once control is transferred (which could be at contract-inception). This could accelerate revenue for companies that currently apply the lease modelto their licensing contracts. Revenue is recognized over the contract term when the licenseis exclusive and the term is less than the economic life of the asset. This might deferrevenue for companies that currently apply the sale model. It is expected that companies inthe Entertainment & Media, Pharmaceutical & Life Sciences, Retail & Consumer and

Technology industrieswill be most impacted by the proposal.

DisclosuresThe proposed model will require more extensive disclosures than are currently requiredunder U.S. GAAP and IFRS. The disclosures focus on qualitative and quantitativeinformation, and the significant judgments and assumptions made in measuring andrecognizing revenue.


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Impacts to Existing IT Infrastructure

The system implications will differ by industry and type of customer contractingarrangements. It is also worth recognizing that companies may have a variety of systems inplace to manage information. With so many systems, it is difficult to generalize the impacts.Therefore the concepts discussed are intended as thought-provoking examples.

As a basic framework, there are five layers of systems that may be impacted, and will needto support different areas of the change. The five layers are:

1. Consolidations / Reporting2. Data Warehouse3. General Ledger4. Subsystem / Subledger5. Governance, Risk and Compliance

Consolidation / ReportingIn the area of revenue recognition, there is likely to be a need to see how the numberswould look under the new standard for a variety of internal stakeholders, before any externalstakeholders see them. To support this, the consolidation and reporting systems would bean ideal place to model these scenarios. This type of modeling provides the benefits offlexibility and "what if" analysis to be performed, however requires data and transactionbalances to be manually updated and uploaded since the supporting transaction systemshave not yet been modified. As an accounting treatment is developed, the manual updatingand uploading can be increasingly replaced by system feeds sourced from the modifiedtransactional systems discussed below.

From the reporting standpoint, there will be a need for multiple parallel accounting standardsto be represented by the reporting systems. There will also be a need to supportcomparative reporting requirements for accounting purposes on a retrospective basis for anumber of years, but there may also be a need to compare converged U.S. GAAP withlegacy U.S. GAAP on an ongoing basis for tax and other regulatory bodies.

Finally, the disclosure information that these consolidation / reporting systems provide willrequire some level of enhancement to support the additional information needs. Thedetailed information captured by the subsystems / subledgers described below, will need tobe summarized and included in this system layer to enable efficient and timely reportingminimizing the impact on the financial closing process.

Data WarehouseThe data warehouse will need to be evaluated to see how the change in transactionaltreatment will impact the usability of the data. The data warehouse is often used as thesource for developing financial analysis and ratios. The underlying data may impact howthe financial analysis and ratios are calculated and how comparative data is produced.

The need to identify and track all potential performance obligations in an arrangement,including how to allocate (contingent) consideration to those obligations so that revenue canbe appropriately recognized, has the potential to increase the need for much greateranalysis of the sales strategies, promotional activities and service commitments. The ability


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to capture all of the necessary detail in the data warehouse to support financial analyticsmay create the need for significant change.

The greater use of estimates will require more use of trend data to support the estimatesused. The ability to connect these estimates with the subsequent full completion of theperformance obligations will be important in supporting the reliability of the financial

statements. The data warehouse is the system in which the development of trend datareporting can be managed.

General LedgerFor the majority of companies with an ERP solution in place, the general ledger (GL) iscurrently being used to capture entries sourced in a subledger / subsystem. The impact tothe general ledger will depend on how much information can be handled by the transactionsystem. There will be different values posted into the GL, and depending on the approachtaken, this could require additional GL accounts or ledgers to support the multiple balancesrequired for reporting. The integration between the GL and the data warehouse andconsolidation / reporting systems will also need to be considered since these multiple GLbalances will need to be fed up the reporting food chain.

Subsystem / SubledgerRevenue related systems vary widely across industries from mass billing systems, to pointof sale (POS) based systems, to large project based systems. The impact will be differentfor each system, but change looks to be likely across a broad spectrum for all industriesmentioned above.

There are multiple areas where the sales and revenue systems could be impacted:

Identification and recognition of performance obligations in the sales or billingsystems must occur so that revenue can be mapped against them. This may requirea sales transaction to be recorded as multiple line items in the system for each

performance obligation (e.g., automotive tooling arrangements, video game andadditional services, bill and hold arrangements). This may also require contactaccounting systems to be able to track additional levels of detail for eachperformance obligation (e.g., advertising, technology and bundled telecomcontracts).

Reliance on estimates - has increased with the converged revenue standard, andcoupled with that is the need to gather and retain the supporting data (e.g., variableor contingent consideration relating to transaction price). System considerations forcapturing and storing this data, as well as reconciling it back to the transactionsystems will need to be explored, and the approach is likely to vary by industry.Specifically the discontinuance of the residual method and the gross profit

method is expected to have a direct impact on the calculations performed bycompanies that use these in their current revenue recognition policies.

Credit risk exposure to customers at the point of sale may reduce revenue at theoriginal point of sale. Sufficient information about credit risk must be available tosupport the approach taken, and to book any adjustments impacting the amount ofrevenue to be recognized at the time of sale. To support this process, companiesmay need to consider enhancing their current customer credit risk trackingcapabilities. This could involve establishing new or enhancing existing credit risk


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reporting systems to support timely analysis, greater granularity and revenuematching.

Product warranty accounting which may be part of the sales and revenue systems,may need to adapt to the revised approach. For warranties that will requireadditional performance obligations, the system must be able to release the revenue

as the performance obligations are met. This could be achieved via triggers in thesystem based on duration from the original sale or a separate external trigger.

Timing of license revenues - under certain scenarios may be recognizable at anearlier point than under existing accounting rules. This would require that anylicensing revenue systems to have an additional revenue trigger that does notcurrently exist. Enabling existing systems to support multiple revenue triggers basedon certain license characteristics may also require capturing additional data elements(e.g., exclusive vs. non-exclusive) to support the revenue determination process.

How these transactional systems will support the proposed standard, along with anycomparative or parallel reporting requirements, should be thoroughly understood. Mostsales and revenue systems can adapt to having additional transactional detail that can be

viewed differently to support the reporting requirements, but are not well suited to havingmultiple parallel sets of information.

With revenue related systems requiring very careful change, and in industry groups wherechanges to customer billing can create significant customer service issues, the systemschanges will need to be thought through carefully and well in advance. In addition, in caseswhere companies support revenue recognition areas using manual processes andnumerous spreadsheet calculations, this change in accounting may be a good opportunity tore-visit and improve processes, investing in a more sustainable system supportedenvironment.

Governance Risk and Compliance

It is clear from the above discussion that business processes and supporting technologieswill need to adapt to changes in the proposed new revenue recognition standard. Thesechanges will drive corresponding impacts on the related control environment andcompliance requirements. Companies in all industries will need to evaluate these impactsand determine the appropriate modifications that will help ensure that operations stay incompliance and financial risks are controlled.

In the evaluation of controls and compliance areas, companies may also want to considerhow effective and efficient the supporting controls are. This would include assessing themix of system supported vs. manual controls to determine opportunities for more automationin controls and additional reports that may be necessary to support reconciliations.


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Initial Revenue Recognition Discussion Questionnaire

One way companies can get started is to assess the potential impact of these accountingchanges on your financial reporting systems and financial statements. A logical first step isto try to understand the scale of the potential effort at your organization, including the salesorganization, treasury, income tax, and human resources. For example, changes in thetiming or amount of revenue recognized may affect sales agreements, long-termcompensation arrangements, debt covenants, and other key ratios. The proposed standardmay also affect mergers and acquisitions in a number of ways, including deal models (e.g.,amount and timing of revenue recognition may be different) and how earn-outs are triggeredif determined based on revenue. Below are a few questions that can help companiesperform a self assessment to try and understand the scale of the potential effort at yourorganization.

1. How many different types of revenue transactions do you have? Where are the salesagreements located and maintained?

2. What are the sales terms included in your major sales agreements that determinerevenue recognition?

3. Do you have any multiple-element arrangements for which you have to apply specificrevenue recognition rules (such as ASC 605-25 (EITF 00-21) or IAS 18. 13)?

4. Do you sell any product that includes embedded software or do you sell software forwhich you have to apply industry-specific revenue recognition rules (like ASC 985-605 (SOP 97-2) or IAS 18.13)?

5. Do you provide construction-related services for which construction accounting (ASC605-35 (SOP 81-1) or IAS 11) is to be applied? Do you use the gross profit methodwithin the percentage-of-completion model or the completed contract model?

6. Do you generate licensing revenue and is this revenue related to exclusive licenses?Are the licenses for the entire economic life of the asset or for a part of it?

7. Do you record contingent revenue for which revenue is deferred until collectability isreasonably assured or for which you use a best estimate model to estimate theamount of revenue to be recognized?

8. Do you provide standard and / or extended warranties with your product?

9. Do you have any bill and hold arrangements?

10. What systems do you use to manage your revenue? To what extent are theycustomized or off the shelf? Are there multiple systems that will be impacted acrossdifferent lines of business?

11. Have you had discussions with your technology provider about their ability to makesystem changes to meet the new standard?


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Conclusion

In summary, the proposed revenue recognition standard will have far reaching implicationson companies and will not only affect IT systems and controls, but also the information

needs, financial metrics and strategic business decisions. As such, companies may want tobegin thinking about potential business implications now, before a final standard is issued.

If you would like further information on the proposed revenue recognition standard orassistance in determining how it might affect your business, contact information for the PwCauthors is provided below.

For additional insight regarding the business impacts of convergence between U.S. GAAPand IFRS, please visit PwC's dedicated convergence website atwww.pwc.com/usgaapconvergence .

About the Authors

Jim Kaiser is PwC's U.S. GAAP convergence & IFRS leader. As such, he leads amultidisciplinary team in developing the firm's strategy to help clients through the complexbusiness issues related to near-term convergence and ultimate conversion to IFRS in theU.S. Jim has over 30 years experience serving major international clients in a wide range ofindustries. He has worked extensively with his clients in mergers and acquisitions includingdue diligence, merger integration and public offerings services, and has led his clients in re-engineering their audit and closing processes. Jim developed PwC's industry program forthe chemicals, forest products, metals, and diversified manufacturing industries. He serveson a number of boards as well as the American and Pennsylvania Institutes of CertifiedPublic Accountants. [email protected]

Denise Cutrone is a partner in PwC's Transaction Services Group in Atlanta servicingfinancial services clients nationwide. Denise is fully dedicated to providing clients advisoryservices in conjunction with complex or new accounting standards and conversions toInternational Financial Reporting Standards ("IFRS") or U.S. GAAP. She is one of ourconversion and embedding experts, who has assisted Global companies with IFRS and U.S.GAAP conversions for the past 13 years. Aside from providing technical and conversionadvice, some of her projects have included the redesign of financial reporting in order toenhance standardization and processes. Denise has also supported clients with varioustypes of capital market [email protected]

Ramon Scheffer is a director in PwCs Transaction Services Group in Atlanta, with more

than 12 years of experience, dedicated to providing clients accounting advisory services toglobal clients in conjunction with conversions to IFRS as well as U.S. GAAP / SECaccounting and reporting matters, including revenue recognition. His clients mainly includepublic companies in the retail & consumer, technology, healthcare and industrial productindustries. In addition, he serves a number of foreign-owned private companies in the U.S.planning to adopt IFRS. Ramon is originally from the Netherlands and is a RegisteredAccountant (RA) with the Netherlands Institute of Registered Accountants (NIVRA) and aCPA in the State of Georgia. [email protected]
http://www.pwc.com/usgaapconvergencehttp://www.pwc.com/usgaapconvergencemailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]://www.pwc.com/usgaapconvergence


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Richard Cebula is a Director in PwCs Advisory Practice in New York, with more than 16years of experience providing assurance and consulting services to his clients. Richardspecializes in providing project implementation support, pre and post-implementationreviews, and business process improvement assessments for clients in an SAPenvironment. He has extensive experience in ERP implementations including some of thelargest implementations for global organizations. He has worked with clients in a variety of

industries including: Pharmaceuticals, Retail and Consumer, High Tech and FinancialServices. Richard leads our team in developing thought leadership around the technologyimpacts of the global move to IFRS Accounting Standards. He has been involved in multipleIFRS-related assessments for global companies, and has been a frequent speaker at SAPrelated conferences relating to the topics of system impacts of IFRS. Richard is a CPA inthe State of New Jersey. [email protected]

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