Issue Alert

February 16, 2011

Are You Ready for the Proposed Changes to Revenue Recognition?

By Jim Kaiser, Denise Cutrone, Ramon Scheffer and Richard Cebula, PricewaterhouseCoopers, LLP

Revenue recognition, like lease accounting, is a priority project that is part of the convergence efforts of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) (the boards"). On June 24, 2010, the boards jointly issued an exposure draft titled Revenue from Contracts with Customers that proposes a new revenue recognition standard which could significantly affect current revenue recognition policies for many companies. When the comment period for this exposure draft ended on October 22, 2010, over 960 comment letters were received and the boards have commenced re-deliberations on certain aspects, making some changes to what was proposed in the exposure draft. This Issue Alert reflects changes made through February 2, 2011. More changes are expected as a result of the re-deliberations to be completed during the second quarter of 2011. A final revenue standard is expected to be issued in the second quarter of 2011. An effective date has not yet been determined.

What should companies be doing now?

Inventory existing sales agreements and related accounting policies and perform an assessment to determine the impacts of the proposed standard to your company. A sample selfassessment, Initial Revenue Recognition Discussion Questionnaire, is provided on page 11. Consider impact on strategic business initiatives such as changes in bundling, pricing, go-to-market strategy, new product and service offerings. Consider impact of the new rules upon related company processes and compensation plans. Evaluate existing IT systems and discuss with technology providers to assess the systems current capabilities and whether upgrades are necessary and available. Begin to assess what data will need to be collected and analyzed prior to adoption to allow for comparative presentation. Establish a training and communication plan.

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Overview of the Proposed Standard

The boards' objective in issuing a converged standard is to increase the consistency of revenue recognition for similar contracts, regardless of industry. The boards noted that existing guidance under U.S. generally accepted accounting principles (U.S. GAAP) may, in some cases, provide different revenue recognition models for contracts with similar economic characteristics. Existing International Financial Reporting Standards (IFRS) contain less guidance than U.S. GAAP on revenue recognition, and the boards noted it is sometimes difficult to apply beyond simple transactions, leading to diversity in practice. The proposed standard will represent a significant shift in how revenue is recognized in certain circumstances. It moves away from specific measurement and recognition thresholds and removes industry-specific guidance. Therefore, the proposed standard is likely to have a more significant effect on some industries than others. The most significantly impacted industries are expected to include: Automotive Engineering & Construction Entertainment & Media Healthcare Industrial Products & Manufacturing Pharmaceutical & Life Sciences Retail & Consumer Technology Telecommunications Transportation & Logistics

The proposed standard is a single, contract-based approach in which revenue is recognized when an entity satisfies its obligations to its customers, which occurs when control over a good or service is transferred to the customer. Compared to current practice, revenue and cost recognition might change as it relates to the timing and the amount recognized. The proposed revenue recognition guidance will affect some companies more than others, although all companies should expect some level of change. The boards have identified the following areas which may be significantly affected: Recognition of revenue based solely on the transfer of goods or services - contracts for the development of an asset (for example, construction, manufacturing, and customized software) would result in continuous revenue recognition only if the customer controls the asset as it is developed. Identification of separate performance obligations - an entity would be required to divide a contract into separate performance obligations for goods or services that are distinct and are delivered at different times. As a result of those requirements, an entity might separate a contract into units of accounting that differ from those identified in current practice. Licensing and rights to use - an entity would be required to evaluate whether a license to use the entitys intellectual property (for less than the propertys economic life) is granted on an exclusive or nonexclusive basis. If a license is granted on an exclusive basis (for less than the property's economic life), an entity would be required to recognize revenue over the term of the license. That pattern of revenue recognition might differ from current practice.

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Effect of credit risk - in contrast to some existing standards and practices, the effect of a customers credit risk (that is, collectibility) would affect how much revenue an entity recognizes rather than whether an entity recognizes revenue. Increased use of estimates - in determining the transaction price (for example, estimating variable consideration) and allocating the transaction price on the basis of standalone selling prices, an entity would be required to use estimates more extensively than in applying existing standards. Accounting for contract-related costs - the proposed guidance specifies which contract costs an entity would recognize as expenses when incurred and which costs may be capitalized because they give rise to an asset. Applying that cost guidance might change how an entity accounts for some costs.

The proposed standard requires full retrospective application, including application to those contracts that do not affect current or future periods, but affect reported historical periods. The boards have not decided on the effective date for the proposed standard, but they have discussed possible effective dates no earlier than 2014 to provide management adequate time to prepare for and implement the proposed standard. In October 2010, the boards issued a discussion paper seeking feedback about the time and effort involved in adopting a number of proposed accounting standards. As part of this outreach effort, the FASB is particularly interested in obtaining views on effective dates and transition methods. The FASB said that it will use the feedback it receives to develop implementation plans to help companies manage the pace and cost of change, including implementation of the proposed revenue standard. The proposed standard may have broad implications for an entity's processes and controls. Management may need to adapt their existing IT systems and internal controls in order to capture information to comply with the proposed guidance. Therefore, companies should begin assessing the implications of the proposal on existing contracts, technology and processes.

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The Key Provisions

Performance Obligations
Under the proposed model, revenue is recognized upon the satisfaction of an entity's obligations to its customers (performance obligations). The proposal defines a performance obligation as an enforceable promise in the contract that includes both explicit and implicit promises to transfer goods and/or services to a customer. Performance obligations are considered to be satisfied when control of a good or service transfers to the customer, which is when the customer is able to use, and receive benefits from, the good or service. Identifying the performance obligations in a contract will be critical in applying the proposed model and will require significant judgment. This may be particularly challenging for service arrangements and long-term contracts. Also challenging will be determining when performance obligations should be combined and when they should be separated. Generally, the identification of separate performance obligations under the proposed model which might have been accounted for as one unit of accounting under the current rules or separated into individual deliverables differently, might impact the timing and the amount of revenue recognition and corresponding margins. This might have a significant impact if control transfer occurs at different times compared to when revenue is recognized under the current guidance. Control transfer is further determined based on a non-exhaustive list of indicators, giving companies the ability to better reflect the economics of their revenue transactions. The following industries could be impacted as follows: In the Automotive industry, tooling arrangements might be impacted because suppliers generally account for these as one unit of accounting under existing guidance, with revenue recognized for the tooling and output from the tool as parts are delivered by the supplier to the original equipment manufacturer (OEM). Under the proposed guidance, the tooling and output from the tool are likely to be two separate performance obligations, resulting in earlier revenue recognition than under existing guidance. Revenue for the tooling is likely to be recognized before the transfer of parts if control of the tooling transfers to the OEM prior to the transfer of outputs derived from the tooling. In the Engineering & Construction industry, under current guidance, contractors often account for each contract at the contract level the macro-promise to build a road for example, as one unit of accounting. The proposed guidance could potentially require the separation of such a contract into multiple performance obligations related to clearing, grading, and paving, for example, resulting in revenue and margins specific to these performance obligations to be recognized separately when control transfers to the customer. Under current guidance, companies in the Engineering & Construction industry recognize revenue using the percentage-of-completion method when reliable estimates are available, which might be at different times when compared to when control transfers continuously, as defined in the proposed standard. The gross profit method to determine revenue and gross profit will no longer be allowed only the Revenue method is to be used. Many Industrial Products & Manufacturing companies and some Telecom entities have contracts where they provide a service (installation or customization) along with their products and therefore, are expected to be impacted similarly.

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In the Entertainment & Media industry, video game developers will need to determine whether the video game and additional services (such as online services and multiplayer functionality) should be accounted for as separate performance obligations under the proposed standard, leading to different timing of revenue recognition compared to current guidance. Currently, video game developers might be required to recognize revenue for the game and additional services together over the service period. Advertisers in the Entertainment & Media industry, will need to assess whether advertising contracts include more than one performance obligation (for each type of placement) to be accounted for separately as the proposed standard is less restrictive than current guidance related to identifying multiple deliverables. In the Industrial Products & Manufacturing as well as the Pharmaceutical & Life Sciences industry, revenue related to bill and hold arrangements might be recognized earlier when compared to current guidance because a fixed delivery schedule is no longer necessary in order to recognize revenue. Research services, joint steering committee participation and FDA submission in collaboration and licensing arrangements, commonly used in the Pharmaceutical & Life Sciences industry, might be separate performance obligations under the proposed standard, recognized when control transfers to the customer which could be different from the current guidance. Customer loyalty programs used in the Retail & Consumer as well as the Transportation & Logistics (primarily airlines) industry, are considered separate performance obligations under the proposed standard. Revenue will be allocated to the points and recognized separately when points are redeemed and control of the goods or services has transferred to the customer or when such points expire. The commonly used incremental cost model under current guidance will no longer be allowed. Breakage is considered in the allocation of revenue to the separate performance obligations for both loyalty programs and gift cards, which is expected to eliminate the current diversity in practice. Technology companies will need to assess whether contracts include multiple performance obligations (such as hardware, extended maintenance and other service elements) which is done on a less restrictive basis when compared to current guidance. Therefore, potentially more performance obligations will be accounted for separately, impacting the timing of revenue recognition. Telecom entities regularly enter into contracts with customers that bundle the sale of telecom services, activation/connection services, and equipment (for example, handsets, modems, etc.) which might not constitute a separate performance obligation under the current guidance. This change may impact the timing and amounts of revenue and margin to be recognized. In addition, the proposed standard might accelerate the timing of revenue recognition for U.S. entities to the delivery date or publication date for hard copy publications (such as periodicals and phone directories) the date on which the performance obligation is satisfied.

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Transaction Price
The boards are proposing that revenue be measured based on the transaction price, which is the amount the customer promises to pay in exchange for goods or services. The transaction price may be easy to determine when it is a fixed amount of cash at the time of sale. However, it may be more difficult to determine if the consideration varies depending on the resolution of an uncertainty or when the transaction price is affected by the time value of money. In what is a fundamental shift from most current practices, the transaction price will include variable or contingent consideration when such amounts can be reasonably estimated. In those cases, the transaction price is measured using a probability-weighted estimate of the consideration expected to be received. The transaction price should also reflect the customer's credit risk by recognizing only a probability-weighted estimate of the expected receipts and the impact of the time value of money, when material. The proposal will require greater use of estimates than under existing guidance. All industries are expected to be impacted to a varying extent by the requirement to reflect the customers credit risk or collectability by recording revenue based on a probabilityweighted estimate of the expected receipts. For most companies, current guidance requires revenue to be recognized when payment is reasonably assured (or probable). As collectability is no longer a recognition threshold, revenue may be recognized earlier than current practice. Collectability affects the measurement of revenue under the proposed standard, as credit risk is reflected as a reduction of the transaction price at contract inception rather than as bad debt expense. Subsequent changes to the assessment of collectability will be recognized as income or expense, rather than as revenue, leading to changes in the geography on the income statement that could significantly impact the topline as well as reported margins. The proposed model requires the transaction price to be allocated to performance obligations based on relative standalone selling prices. Other allocation methods used under existing guidance will not be allowed. The best evidence of the standalone selling price is the price of a good or service when the entity sells it separately. The selling price is estimated if a standalone selling price is not available. As indicated above, a number of industries are expected to be impacted by the requirement to identify and separate performance obligations. Similarly, they are also expected to be impacted by the requirement to allocate the transaction price in a contract to the performance obligations using relative standalone selling prices. Many companies in the Engineering & Construction, Industrial Products & Manufacturing, Pharmaceutical & Life Sciences, and Retail & Consumer industries may experience a significant change when allocating revenue to individual units of accounting in a single contract as well as having to estimate the standalone selling prices. Most companies in the Automotive, Entertainment & Media, Technology, Telecommunications, and Transportation & Logistics industries may not experience a significant change in practice in accounting for multiple-element arrangements. The elimination of the residual method is expected to specifically impact the Software industry, potentially leading to earlier revenue recognition. After the inception of the contract, performance obligations are not re-measured unless the transaction price changes. For example, estimates of the transaction price could change particularly when there is variable consideration. Variable consideration that management

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can estimate reasonably is recognized in revenue at the probability-weighted amount. Currently, variable or contingent consideration is not recognized until the contingency lapses. Therefore, entities might recognize revenue earlier and at a different amount compared to existing guidance. Variable consideration is most commonly applicable to companies in Engineering & Construction (awards, incentive payments, claims), Entertainment & Media (royalties), Healthcare (Medicare / Medicaid), Industrial Products & Manufacturing (volume rebates), Pharmaceutical & Life Sciences (milestone payments and royalties), Technology (royalties and discounts), Telecommunications (rebates and refunds) and Transportation & Logistics (volume discounts). The proposed model requires an on-going assessment of the costs expected to be incurred to satisfy outstanding performance obligations. If the direct costs expected to be incurred exceed the allocated transaction price related to a performance obligation, a loss is recorded immediately. Companies in the Engineering and Construction, Healthcare, Technology, Entertainment and Media, and Transportation and Logistics industries are expected to be impacted by the requirement to assess losses at the performance obligation level. This change may lead to companies recognizing losses that would not have been recognized under current guidance.

Product Warranties
Warranties are common in the Automotive, Engineering & Construction, Industrial Products & Manufacturing, Pharmaceutical & Life Sciences, Retail & Consumer and Technology industries. If a customer has the option to purchase a warranty separately from the entity, the entity should account for the warranty as a separate performance obligation. That is, the entity would allocate revenue to the warranty service. If a customer does not have the option to purchase a warranty separately from the entity, the entity should account for the warranty as a cost accrual unless the warranty provides a service to the customer in addition to assurance that the entitys past performance was as specified in the contract (in which case the entity would account for the warranty service as a separate performance obligation).

Licenses
The timing of revenue recognition for licenses of intangible assets is based on whether the license is exclusive, and whether or not the license is for the entire economic life of the asset. If the license is non-exclusive or for substantially all of the economic life of the asset, related revenue is recognized once control is transferred (which could be at contractinception). This could accelerate revenue for companies that currently apply the lease model to their licensing contracts. Revenue is recognized over the contract term when the license is exclusive and the term is less than the economic life of the asset. This might defer revenue for companies that currently apply the sale model. It is expected that companies in the Entertainment & Media, Pharmaceutical & Life Sciences, Retail & Consumer and Technology industries will be most impacted by the proposal.

Disclosures
The proposed model will require more extensive disclosures than are currently required under U.S. GAAP and IFRS. The disclosures focus on qualitative and quantitative information, and the significant judgments and assumptions made in measuring and recognizing revenue.

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Impacts to Existing IT Infrastructure

The system implications will differ by industry and type of customer contracting arrangements. It is also worth recognizing that companies may have a variety of systems in place to manage information. With so many systems, it is difficult to generalize the impacts. Therefore the concepts discussed are intended as thought-provoking examples. As a basic framework, there are five layers of systems that may be impacted, and will need to support different areas of the change. The five layers are: 1. 2. 3. 4. 5. Consolidations / Reporting Data Warehouse General Ledger Subsystem / Subledger Governance, Risk and Compliance

Consolidation / Reporting
In the area of revenue recognition, there is likely to be a need to see how the numbers would look under the new standard for a variety of internal stakeholders, before any external stakeholders see them. To support this, the consolidation and reporting systems would be an ideal place to model these scenarios. This type of modeling provides the benefits of flexibility and "what if" analysis to be performed, however requires data and transaction balances to be manually updated and uploaded since the supporting transaction systems have not yet been modified. As an accounting treatment is developed, the manual updating and uploading can be increasingly replaced by system feeds sourced from the modified transactional systems discussed below. From the reporting standpoint, there will be a need for multiple parallel accounting standards to be represented by the reporting systems. There will also be a need to support comparative reporting requirements for accounting purposes on a retrospective basis for a number of years, but there may also be a need to compare converged U.S. GAAP with legacy U.S. GAAP on an ongoing basis for tax and other regulatory bodies. Finally, the disclosure information that these consolidation / reporting systems provide will require some level of enhancement to support the additional information needs. The detailed information captured by the subsystems / subledgers described below, will need to be summarized and included in this system layer to enable efficient and timely reporting minimizing the impact on the financial closing process.

Data Warehouse
The data warehouse will need to be evaluated to see how the change in transactional treatment will impact the usability of the data. The data warehouse is often used as the source for developing financial analysis and ratios. The underlying data may impact how the financial analysis and ratios are calculated and how comparative data is produced. The need to identify and track all potential performance obligations in an arrangement, including how to allocate (contingent) consideration to those obligations so that revenue can be appropriately recognized, has the potential to increase the need for much greater analysis of the sales strategies, promotional activities and service commitments. The ability

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to capture all of the necessary detail in the data warehouse to support financial analytics may create the need for significant change. The greater use of estimates will require more use of trend data to support the estimates used. The ability to connect these estimates with the subsequent full completion of the performance obligations will be important in supporting the reliability of the financial statements. The data warehouse is the system in which the development of trend data reporting can be managed.

General Ledger
For the majority of companies with an ERP solution in place, the general ledger (GL) is currently being used to capture entries sourced in a subledger / subsystem. The impact to the general ledger will depend on how much information can be handled by the transaction system. There will be different values posted into the GL, and depending on the approach taken, this could require additional GL accounts or ledgers to support the multiple balances required for reporting. The integration between the GL and the data warehouse and consolidation / reporting systems will also need to be considered since these multiple GL balances will need to be fed up the reporting food chain.

Subsystem / Subledger
Revenue related systems vary widely across industries from mass billing systems, to point of sale (POS) based systems, to large project based systems. The impact will be different for each system, but change looks to be likely across a broad spectrum for all industries mentioned above. There are multiple areas where the sales and revenue systems could be impacted: Identification and recognition of performance obligations in the sales or billing systems must occur so that revenue can be mapped against them. This may require a sales transaction to be recorded as multiple line items in the system for each performance obligation (e.g., automotive tooling arrangements, video game and additional services, bill and hold arrangements). This may also require contact accounting systems to be able to track additional levels of detail for each performance obligation (e.g., advertising, technology and bundled telecom contracts). Reliance on estimates - has increased with the converged revenue standard, and coupled with that is the need to gather and retain the supporting data (e.g., variable or contingent consideration relating to transaction price). System considerations for capturing and storing this data, as well as reconciling it back to the transaction systems will need to be explored, and the approach is likely to vary by industry. Specifically the discontinuance of the residual method and the gross profit method is expected to have a direct impact on the calculations performed by companies that use these in their current revenue recognition policies. Credit risk exposure to customers at the point of sale may reduce revenue at the original point of sale. Sufficient information about credit risk must be available to support the approach taken, and to book any adjustments impacting the amount of revenue to be recognized at the time of sale. To support this process, companies may need to consider enhancing their current customer credit risk tracking capabilities. This could involve establishing new or enhancing existing credit risk

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reporting systems to support timely analysis, greater granularity and revenue matching. Product warranty accounting which may be part of the sales and revenue systems, may need to adapt to the revised approach. For warranties that will require additional performance obligations, the system must be able to release the revenue as the performance obligations are met. This could be achieved via triggers in the system based on duration from the original sale or a separate external trigger. Timing of license revenues - under certain scenarios may be recognizable at an earlier point than under existing accounting rules. This would require that any licensing revenue systems to have an additional revenue trigger that does not currently exist. Enabling existing systems to support multiple revenue triggers based on certain license characteristics may also require capturing additional data elements (e.g., exclusive vs. non-exclusive) to support the revenue determination process.

How these transactional systems will support the proposed standard, along with any comparative or parallel reporting requirements, should be thoroughly understood. Most sales and revenue systems can adapt to having additional transactional detail that can be viewed differently to support the reporting requirements, but are not well suited to having multiple parallel sets of information. With revenue related systems requiring very careful change, and in industry groups where changes to customer billing can create significant customer service issues, the systems changes will need to be thought through carefully and well in advance. In addition, in cases where companies support revenue recognition areas using manual processes and numerous spreadsheet calculations, this change in accounting may be a good opportunity to re-visit and improve processes, investing in a more sustainable system supported environment.

Governance Risk and Compliance

It is clear from the above discussion that business processes and supporting technologies will need to adapt to changes in the proposed new revenue recognition standard. These changes will drive corresponding impacts on the related control environment and compliance requirements. Companies in all industries will need to evaluate these impacts and determine the appropriate modifications that will help ensure that operations stay in compliance and financial risks are controlled. In the evaluation of controls and compliance areas, companies may also want to consider how effective and efficient the supporting controls are. This would include assessing the mix of system supported vs. manual controls to determine opportunities for more automation in controls and additional reports that may be necessary to support reconciliations.

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Initial Revenue Recognition Discussion Questionnaire

One way companies can get started is to assess the potential impact of these accounting changes on your financial reporting systems and financial statements. A logical first step is to try to understand the scale of the potential effort at your organization, including the sales organization, treasury, income tax, and human resources. For example, changes in the timing or amount of revenue recognized may affect sales agreements, long-term compensation arrangements, debt covenants, and other key ratios. The proposed standard may also affect mergers and acquisitions in a number of ways, including deal models (e.g., amount and timing of revenue recognition may be different) and how earn-outs are triggered if determined based on revenue. Below are a few questions that can help companies perform a self assessment to try and understand the scale of the potential effort at your organization. 1. How many different types of revenue transactions do you have? Where are the sales agreements located and maintained? 2. What are the sales terms included in your major sales agreements that determine revenue recognition? 3. Do you have any multiple-element arrangements for which you have to apply specific revenue recognition rules (such as ASC 605-25 (EITF 00-21) or IAS 18. 13)? 4. Do you sell any product that includes embedded software or do you sell software for which you have to apply industry-specific revenue recognition rules (like ASC 985605 (SOP 97-2) or IAS 18.13)? 5. Do you provide construction-related services for which construction accounting (ASC 605-35 (SOP 81-1) or IAS 11) is to be applied? Do you use the gross profit method within the percentage-of-completion model or the completed contract model? 6. Do you generate licensing revenue and is this revenue related to exclusive licenses? Are the licenses for the entire economic life of the asset or for a part of it? 7. Do you record contingent revenue for which revenue is deferred until collectability is reasonably assured or for which you use a best estimate model to estimate the amount of revenue to be recognized? 8. Do you provide standard and / or extended warranties with your product? 9. Do you have any bill and hold arrangements? 10. What systems do you use to manage your revenue? To what extent are they customized or off the shelf? Are there multiple systems that will be impacted across different lines of business? 11. Have you had discussions with your technology provider about their ability to make system changes to meet the new standard?

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Conclusion
In summary, the proposed revenue recognition standard will have far reaching implications on companies and will not only affect IT systems and controls, but also the information needs, financial metrics and strategic business decisions. As such, companies may want to begin thinking about potential business implications now, before a final standard is issued. If you would like further information on the proposed revenue recognition standard or assistance in determining how it might affect your business, contact information for the PwC authors is provided below. For additional insight regarding the business impacts of convergence between U.S. GAAP and IFRS, please visit PwC's dedicated convergence website at www.pwc.com/usgaapconvergence.

About the Authors

Jim Kaiser is PwC's U.S. GAAP convergence & IFRS leader. As such, he leads a multidisciplinary team in developing the firm's strategy to help clients through the complex business issues related to near-term convergence and ultimate conversion to IFRS in the U.S. Jim has over 30 years experience serving major international clients in a wide range of industries. He has worked extensively with his clients in mergers and acquisitions including due diligence, merger integration and public offerings services, and has led his clients in reengineering their audit and closing processes. Jim developed PwC's industry program for the chemicals, forest products, metals, and diversified manufacturing industries. He serves on a number of boards as well as the American and Pennsylvania Institutes of Certified Public Accountants. James.Kaiser@us.pwc.com Denise Cutrone is a partner in PwC's Transaction Services Group in Atlanta servicing financial services clients nationwide. Denise is fully dedicated to providing clients advisory services in conjunction with complex or new accounting standards and conversions to International Financial Reporting Standards ("IFRS") or U.S. GAAP. She is one of our conversion and embedding experts, who has assisted Global companies with IFRS and U.S. GAAP conversions for the past 13 years. Aside from providing technical and conversion advice, some of her projects have included the redesign of financial reporting in order to enhance standardization and processes. Denise has also supported clients with various types of capital market transactions. denise.cutrone@us.pwc.com Ramon Scheffer is a director in PwCs Transaction Services Group in Atlanta, with more than 12 years of experience, dedicated to providing clients accounting advisory services to global clients in conjunction with conversions to IFRS as well as U.S. GAAP / SEC accounting and reporting matters, including revenue recognition. His clients mainly include public companies in the retail & consumer, technology, healthcare and industrial product industries. In addition, he serves a number of foreign-owned private companies in the U.S. planning to adopt IFRS. Ramon is originally from the Netherlands and is a Registered Accountant (RA) with the Netherlands Institute of Registered Accountants (NIVRA) and a CPA in the State of Georgia. ramon.scheffer@us.pwc.com

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Richard Cebula is a Director in PwCs Advisory Practice in New York, with more than 16 years of experience providing assurance and consulting services to his clients. Richard specializes in providing project implementation support, pre and post-implementation reviews, and business process improvement assessments for clients in an SAP environment. He has extensive experience in ERP implementations including some of the largest implementations for global organizations. He has worked with clients in a variety of industries including: Pharmaceuticals, Retail and Consumer, High Tech and Financial Services. Richard leads our team in developing thought leadership around the technology impacts of the global move to IFRS Accounting Standards. He has been involved in multiple IFRS-related assessments for global companies, and has been a frequent speaker at SAP related conferences relating to the topics of system impacts of IFRS. Richard is a CPA in the State of New Jersey. richard.cebula@us.pwc.com

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