LONDON & BOSTON--(BUSINESS WIRE)--Announcement
In response to yesterday’s announcement formalizing new IASB and FASB accounting rules for Revenue Recognition from Contracts with Customers (IFRS 15), Aptitude Software is pleased to announce its new product, Aptitude RRE, to address the new accounting requirements with the performance to rapidly process the associated Big Data volumes of telecom operators and other companies affected by IFRS 15.
The Challenge Posed by New Accounting Requirements
The new accounting standards affect how companies in many industries will recognize revenue. These changes require completion of operational process, accounting and systems changes by 1 January 2017, although many organizations will process the comparative financials from 2016, a very challenging implementation timetable.
IFRS 15 impacts companies in many industries, particularly those such as telecommunications operators and high-tech product manufacturers that use contracts with long-term service obligations and product bundling.
Some companies argued against the new IFRS 15 requirement, in part due to the cost and complexity of implementing new, or adapting existing, IT systems needed to account for millions of transactions and complex multi-part contracts. One telecom operator, for example, indicated in an open letter that it could cost about €20m to change each and every billing system and possibly take 10 years to implement. Despite objections, the accounting standards board yesterday finalized the IFRS 15 standard requiring companies to determine how to implement the new rules rapidly across the enterprise.
Aptitude Software’s Revenue Recognition Engine (RRE)
Aptitude Software’s new RRE product is a high performance, pre-built calculation engine, enabling operators to quickly and efficiently address the accounting requirements while minimizing the impact on existing systems and business models. It fits seamlessly within an organization’s existing environment, reducing the impact on billing systems, and provides template calculations for many common recognition scenarios, outputting current, proposed, and ‘delta’ revenue figures. Its accrual accounting can also be extended to provide custom processing for accruals and deferrals arising from billing cycle cut-offs.
Aptitude Software’s Revenue Recognition Engine is believed to be the first demonstrable product on the market and has been reviewed by leading auditors as well as major US and European telecom operators. It enables companies to integrate detailed contract and billing data; apply revenue apportionment rules; derive balance sheet accruals/deferrals; and manage important lifecycle events such as contract modifications and bad debt provisions.
“Aptitude Software has been working with a number of leading organizations, including some of the biggest telecommunications operators and firms in a range of other industries, to develop the Aptitude Revenue Recognition Engine” says Tom Crawford, President of Aptitude Software. “Given the very short time scales, we believe our first-to-market packaged solution, built on the high performance Aptitude platform, will mitigate the depth of change, risks and costs for those affected by IFRS 15.”
“Aptitude RRE supports contract-level and a portfolio approach to revenue recognition and, through our engagements to date, we have been able to demonstrate that the product not only helps address the new IFRS/FASB requirements but also empowers firms to extract strategic financial insights such as customer and product profitability.”
About Aptitude Software
The Aptitude technology platform helps enterprises to build Big Data-processing applications, empowering customers to address individual requirements with the speed of deployment of packaged software products.
Aptitude Software brings together finance domain expertise with market leading technology, offering a range of strategic finance software applications to streamline financial processing and generate business insights, without replacing existing established systems.
Aptitude Software is a Microgen plc company (LSE: MCGN).
Link to Publication Announcement
International Accounting Standards Board and the IFRS Foundation: http://www.ifrs.org/current-projects/iasb-projects/revenue-recognition/Pages/revenue-recognition.aspx
Federal Accounting Standards Board (FASB): http://www.fasb.org/revenue_recognition.shtml
About Aptitude Software’s Revenue Recognition Engine
The Aptitude Revenue Recognition Engine enables organizations to quickly and confidently address new IASB/FASB revenue recognition requirements.
Product Brochure Download: http://www.microgen.com/uk-en/sites/default/files/520_apt_aptitude_revenue_flyer_a4_v2.pdf
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