Many public relations and advertising firms are finding it difficult to determine whether to record revenue on a gross or net basis when working with third-party vendors under the new ASC 606 standards. ASC 606 is a revenue recognition standard that affects all businesses:
• public, private and non-profit entities
• that enter into contracts with customers to transfer goods or services
• under these guidelines, a company must determine whether they will act as a principal or an agent in providing goods or services.
This determination requires a deeper analysis with a thorough understanding of the transaction, as it will ultimately affect the company’s’ accounting of revenue.
– Bill McGinley, Anchin, Block and Anchin LLP