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Gross vs. Net?

by Truevine

Many public relations and advertising firms are finding it difficult to determine whether to record revenue on a gross or net basis when working with third-party vendors under the new ASC 606 standards. ASC 606 is a revenue recognition standard that affects all businesses:

• public, private and non-profit entities

• that enter into contracts with customers to transfer goods or services

• under these guidelines, a company must determine whether they will act as a principal or an agent in providing goods or services.

This determination requires a deeper analysis with a thorough understanding of the transaction, as it will ultimately affect the company’s accounting of revenue.

– Bill McGinley, Anchin, Block and Anchin LLP

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