Marisa Garcia, managing director of CohnReznick Advisory, discusses what companies should be doing to prepare for the new revenue recognition standard.

GARCIA: The first step to prepare for the standard is to do what’s called an assessment or a gap analysis, and to evaluate all of their customer contracts, how they’re accounting for them today, how the standard will require for them to account for them tomorrow under the new rules, and identify what differences there may be in their current processes and their accounting functions.

Once they’ve identified the gaps, then they can create an implementation plan about what systems and processes and controls they’ll need to adjust so that when they’re required to implement the standard they will be ready.