If you’re involved in corporate finance these days, scary times aren’t confined to the month of October.

That eerily omnipresent sound you’re hearing isn’t slow footsteps creaking across floorboards as the grim reaper approaches, but rather the spine-tingling tick-tock-tick-tock of a clock counting down to the 2018 effective date for the new revenue recognition accounting standards.

A ‘doomsday clock,’ if you will.

Yes, that’s the vision being seeded into people’s heads following new frightening findings to come out of the most recent collaborative survey by PwC and Financial Executives Research Foundation (FERF). Many companies have yet to finish assessing the impact of the new revenue standard and others haven’t even started.

Keep in mind, while the effective date for being compliant with the new five-step, principles-based revenue recognition standard (ASC 606 / IFRS 15) is January 1, 2018, estimates are that it takes about 18 months for the average corporation to adopt to this new standard – and we’re only 14 months out right now.

For those still working their way through impact assessments or yet to begin, the grim reaper might be a welcome relief.

We kid, but do we?

The time to dawdle on this massive undertaking has passed. Even for the private companies with an extra year to comply – there needs to be a sense of urgency which isn’t evident.

The fundamental questions sought by the third joint study from PwC and FERF are (1) whether companies are ready and (2) what are the key challenges of the transition.

Facts and figures boil down the answer to that first question as a resounding “No.” We’ll come back to that second question.

Some findings from the industry-spanning online survey of more than 700 executives in accounting and finance in August of 2016:

• Nearly two-thirds (65%) are still assessing impact of the new standard
• Only 13% have actually started implementing
• Of companies in the private sector, nearly half (47%) haven’t started any assessment
• More than half (52%) have yet to choose an adoption method to transition their financial reporting to the new standard

This study confirms a widely held belief that most organizations have yet to grasp a clear understanding of how this change will impact them.

While the intention of the newly converged standards is to improve comparability across industries – and across the globe – getting there is by no means an easy task, hence the current quagmire. This wholesale replacement of nearly all current revenue recognition requirements under IAS & US GAAP means “IFRS 15 and ASC 606 will change the way private, public and non-profit organizations manage business processes, earnings statements, and internal control over financial reporting,” as stated in the doomsday-clock-envisioning article by FEI on the survey.

When it comes to revenue recognition, time is not on your side. Although it may seem far away, time to implement these new processes is quickly running out, according to FEI. Stagnant companies hoping to accomplish any meaningful dual reporting prior to adoption of the new standard are watching that opportunity vanish.

CFOs and other financial leaders need to evaluate the imposing challenges not just to accounting departments, but across the enterprise as a whole.

The three-pronged plan recommended by experts includes a significant investment in professional development for affected employees and the necessary time and dedication to understand how both revenue and earning will be affected.

Let’s see where that effort stands, according to the survey:

• Due to the lack of respondents yet to complete impact assessments, there is no reliable estimate on overall cost to implement at this time so take with a grain of salt that 58% expected implementation costs wouldn’t exceed $500K
• Nearly two-thirds (63%) planned to leverage existing resources to implement the new changes, with only a third (34%) expecting to utilize the equivalent of more than three full-time staffers in the effort
• While contract review topped the list of potentially difficult implementation issues at 78%, the majority of respondents ticked off just about all listed issues, including documentation of a conversion process, developing new accounting policies and revisions to systems and associated controls – most suggesting “none of this is easy.”

“Every company is saying that everything is difficult,” said Dusty Stallings, partner at PwC, in a Wall Street Journal article on survey findings.

What can you do?

According to FEI, here are some helpful details for that proposed plan:

Training – it is estimated that about nine months of active use is required to get up to speed on the new standard. There is no time to waste in educating existing staff who, as findings indicate, will bear the bulk of the implementation work. Resources and training materials for businesses to use in-house are plentiful and can be found through FASB, AICPA, the IFRS and many accounting firms and consultancies.

Revenue – the new five-step model under the new standard is more event-driven. Performance obligations including services, warranties, delivery of goods and money back guarantees required to be performed in order to recognize revenue must be transparently recorded, priced and recognized, but at the appropriate time of completion. In short, expect revenue transparency to evolve significantly and timing to be impacted, though to what level depends on your industry and company.

Earnings – altering how revenue is calculated and performed will impact a company’s earning. Since companies will want to see the impact to their financial statements before anything is released to the public, most will want to run in parallel for a good portion of time, say six months, for comparison sake. In addition, the impact to taxes and tax liabilities through these changes must not be forgotten.

The luxury of time is no longer on the side of the financial executive. To ensure readiness for the looming 2018 deadline, a proper understanding of the impact of the new standard to both revenue and earnings is needed along with adequate training of the staff charged with carrying out the transition.

Scary, huh?