Home Accounting Gross vs. Net?

Gross vs. Net?

by The 100 Companies
Gross vs. Net?

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

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