Revenue recognition has been the focus of the finance community for many years. The newly converged standard requires every company, public or private, to consider how the changes will impact how and when they recognize revenue.
The Accounting Standards Update, Revenue from Contracts with Customers, as issued by the Financial Accounting Standards Board (FASB) will effect annual reporting for public companies beginning December 16, 2017, including interim periods within that reporting period. For non-public entities, the deadline is December 16, 2018.
This new standard replaces virtually all U.S. GAAP guidance that currently exists on revenue recognition with a single model to be applied to all contracts with customers. It provides a significant amount of judgment and added complexity, moving to a principles-based approach instead of providing a series of rules that apply in different scenarios.
The Revenue Recognition team at Frazier & Deeter helps both public and private companies transition to the new standard and can determine if existing accounting policies and systems reflect the new standard.