Companies face an ambitious timeline to digest 700 pages of new rules on how to recognize revenue in financial statements. Some are facing dramatic changes that could affect accounting processes in as little as six months.
The Financial Accounting Standards Board and the International Accounting Standards Board capped off more than a decade of research, consultation, and deliberation with the final publication of a new accounting standard for how all companies must go about determining when and in what amounts to recognize revenue. “The result, I believe, is a standard that succeeds in its goal of improving financial reporting,” FASB Chairman Russ Golden said in a statement. The new rule “provides a more robust framework for addressing revenue issues as they arise by increasing comparability across industries and capital markets and by requiring enhanced disclosures that give investors and other users a better understanding of the economics behind the numbers,” he said.
