The Impact of IFRS 15 / ASC 606 on the Sales Organization

In 2014, the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) began converging compliance standards for sales commissions. Encapsulated under IFRS 15 and ASC 606, sales commissions must now be capitalized and amortized across an agreed upon expected customer lifecycle. These regulations have a ripple effect across the finance and sales organizations, and managers of both long-established and growing companies need to have an understanding of how those rules could impact how they negotiate deals, manage renewals, and recognize the true cost of any given deal.