Why smart manufacturers review their contracts

Description

Abstract: Manufacturers and distributors may enter into various types of long-term contracts, including property and equipment leasing, raw materials, confidentiality, exclusivity and joint venture agreements. This article explains why these contracts should be reviewed regularly to ensure that they remain enforceable, compliant and financially advantageous. It also introduces another reason to check up on long-term contracts: ASU No. 2014-09, Revenue from Contracts with Customers. Although the FASB has postponed implementation of the updated guidance for an additional year, proactive companies will start tracking the effects of the changes as soon as possible to meet the FASB’s retrospective application requirements.