The Details:

Recent changes to the Revenue Recognition (ASC 606) standard of the Generally Accepted Accounting Principles (GAAP), which have been in the works for 15 years, represent one of the largest changes in the history of accounting. All businesses and their transactions, regardless of the industry, will be impacted by the new standard, which is discussed in a recent article in the Boston Business Journal.  

The standards have been effective for public companies since Dec. 15, 2017 and will go into effect for non-public companies for periods beginning after Dec. 15, 2018. 

Key Takeaways:

The article outlines the goals of the standards as follows:

  • Aims to improve consistency and comparability of revenue recognition across industries
  • Changes from a rule-based to a principle-based model
  • Introduces a greater element of judgment

The new changes will impact almost every department of organizations, outside of just finance and accounting departments. Further, the changes impact multiple industries, including manufacturers, distribution, and construction.

While the changes will not likely impact how much revenue is recognized, it will more than likely affect when revenue is recognized, which could impact the valuation of a company. This could significantly impact business owners who are transitioning out of their businesses.

The Bottom Line:

Business owners should implement new strategies as soon as possible, especially if you’re thinking about transitioning out of your business. Each department should have new strategies in place to ensure a fast implementation, and avoid a difficult transition. The article suggests, “this collaborative strategy should continue past the initial implementation stage to ensure that the best business decisions possible are made.”

Most owners planning for retirement are dependent on the sale of their companies to provide money for retirement. It’s more than likely they will need to boost the value of their businesses to achieve their goals. In conjunction with your overall business transitioning process, be sure to “consult with your trusted financial and business advisor to get started, and keep them in the loop to ensure all of the necessary aspects of the new standards are taken into consideration.”

Other Business Transition News:

The Second Quarter of 2018 Insight Report from is reporting that record levels of businesses are changing hands. Of these, a third are being bought by non-natural born citizens, of which 64% are first-generation immigrants. The majority of new buyers are under 50 years old, with 65% identifying themselves as Caucasian, a drop from 71%. Women make up 22% of the buyers.

Many business owners plan to donate some of the proceeds when they sell their firms, Fidelity Charitable finds. Eight in ten entrepreneurs say charitable giving is a critical part of who they are, and nearly half consider themselves philanthropists.

A cohesive narrative will build credibility during the due diligence process and save CFOs from spending valuable time producing one-off analyses.

Just because we are in family businesses, it doesn’t mean we are allowed to be uncivil to each other. And yet, family members all too often simply accept that bad tempers, fights, and yelling are just part of the mix.


Our mission is to assist the owners of privately held companies in making key transition decisions that impact their future, as well as the future of their businesses, families, and employees.

As a business owner and co-founder of BTA, Jane Johnson recognized the need to educate business owners about the importance of planning ownership transitions to achieve their goals and ensure business continuity. The challenges Jane experienced with selling her own business inspired her to co-author the book Cashing Out of Your Business – Your Last Great Deal and develop tools and resources to inform and empower other owners to plan and execute successful ownership transitions.


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