Nearly three-fourths of chief finance and information officers in a recent poll said they made changes to their revenue recognition disclosures after their first reporting under the new standard more than a year ago, and a similar number said adopting the standard cost far more than they projected.

Only 29 percent of CIOs and CFOs at both public and private organizations in a recent EY survey said they made no changes to their revenue recognition disclosures since their first quarterly filing observing Accounting Standards Codification Topic 606. ASC 606 took effect for public companies on Jan. 1, 2018; the standard gave private companies an additional year to prepare.

The Securities and Exchange Commission signaled in 2018 that it believed some companies needed to reconsider what they had reported in the first few quarters and refine or evolve their disclosures in future periods. SEC staff also indicated they would be scrutinizing year-end reporting.

Companies continue to work on revenue recognition implementation activities, EY says, whether to adapt to comments from regulators, auditors, or other stakeholders, or to transition from short-term manual fixes to longer-term technology solutions. Four out of five organizations in the poll said they found it difficult to gather the data necessary to comply with the standard, and many adopted workarounds to comply by the effective date.

Three out of four organizations in the survey also reported their total costs to comply with the standard far surpassed their expectations. Public and private companies on average estimated they would spend $3.3 million to adopt the new accounting, where a similar survey in 2017 revealed an average cost expectation of $1 million or less.

Despite the increased costs, the poll also suggests a clear majority expect their investments to yield value in terms of business benefits beyond compliance. Nearly half, or 42 percent, said they are seeing improved data quality and better insights into business performance, and nearly 40 percent said they see better risk, control, and compliance after adopting ASC 606. Similar numbers said they see benefits from transforming systems and driving greater process automations and from identifying strategic cost reduction opportunities.

“There is a light at the end of the tunnel,” said John McGaw, Americas accounting change leader at EY. “Organizations ultimately see the value and promise in these changes. By taking a strategic approach, they can actually drive improvements across their systems, processes, controls, and operating models.”