The Hefty Impact of ASC 606 on Sales Commissions
The Hefty Impact of ASC 606 on Sales Commissions
8 PagesThis guide explains how ASC 606 significantly affects the way businesses account for sales commissions. Introduced by the Financial Accounting Standards Board in 2014, ASC 606 changed how revenue is recognized under GAAP and requires companies to account for certain costs associated with earning that revenue. For many organizations, these costs include sales commissions, which must now be capitalized and amortized rather than expensed immediately. The guide outlines what ASC 606 is, how it impacts financial reporting and operations, and how companies can better manage compliance and commission accounting through improved systems and processes.
