You’re probably already familiar with ASC 606
ASC 606 came into effect in 2018 for public companies and in 2019 for private businesses. It was put in place to increase the consistency of financial reporting across industries—which is great, but in the subscription world, keeping up with it still causes headaches.
ASC 606 dictates that revenue must only be recognized after value has been delivered to the customer. And given the ongoing nature of subscriptions…well, you see where it can get complicated. Adopting ASC 606 means SaaS, IoT or any other subscription-based businesses need the ability to track earned and deferred revenue over the entire period of each customer’s subscription.