Waypoints: Ideas and Insights to Navigate Enterprise Complexity

With 2015 almost in the books, it’s time for most companies to focus on getting their Form 10-Ks issued and to begin planning for 2016.  To help prepare for both of those tasks, we need not look much further than the comments provided by Mary Jo White, SEC chairwoman, and others during the December AICPA Conference on Current SEC and PCAOB Developments.

As the unemployment rate declines and the labor market tightens, attracting and keeping talented staff members is becoming a serious issue. It’s particularly problematic for smaller businesses or those located outside of major metropolitan areas. We’ve noticed fierce competition for key talent in the industries we serve, as well as in our own industry, and I’d like to suggest a strategy for recruiting and retaining effective employees without a substantial outlay of cash – stock-based compensation.

In a recent blog, Josh Edwards mentioned that it’s easy to overlook transition plans in the busy weeks after an acquisition. Senior staff members are setting the direction for the new business while they manage the details of day-to-day operations, and everyone is working hard.

When I began my initial review of the new revenue recognition literature, I expected that some industries like technology, construction, telecommunications and software would see significant consequences to their financial reporting because of changes to the standards.

Here are two important facts:

1. This year, Millennials, adults between the ages of 18 and 34, became the largest cohort in the U.S. workforce, according to Pew Research Center reports.
2. The Census Bureau predicts that Millennials will become the largest group in the U.S. population, not just the workforce, later this year.

According to a recent article in Fortune magazine, the SEC questioned 88 percent of companies in the technology, media and telecommunications industries that went public in 2014 regarding their revenue recognition policies.

The Financial Accounting Standards Board gave us some good news and some bad news in a recent update. The good news is the Board has delayed the effective date for the proposed accounting standards update until periods beginning after December 15, 2017, giving everyone an extra year to prepare. The bad news is that the Board has given everyone an extra year to prepare. With this type of update, it is easy to put off making changes in your company until it’s too late. Don’t delay!