An S-corporation signs contracts with franchisees and earns franchise fee income. In the past years, the S-corporation recognizes revenue once the money is received, however, in 2019, the client adopted a new revenue standard (ASC 606) that it recognizes revenue once it is earned but not received. The accountant of the S-corporation uses a modified retrospective method that results in an adjustment recognized to the opening balance of retained earnings as of the first day of 2019. Does anyone know the tax impact of this issue? I mean, how do I deal with the reduction of beginning retained earnings because of adoption of ASC 606, and 2019, for the tax basis, do we only recognize revenue when we earned it, or all money of franchise income we receive, we recognize it as the income of the S-corporation?