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Companies clearly favor modified adoption of revenue rule

Tammy Whitehouse | August 1, 2017

To understand the seismic shift about to take place in the way companies recognize revenue, investors would love to see three years’ worth of financial statement data presented under the new accounting method.

It is clear, however, that is not going to happen. A clear majority of companies are planning to use cumulative catchup adjustments and disclosures to bridge the gap from old to new accounting.

Public companies are nearing sprint pace to meet a year-end deadline to adopt a massive new accounting standard on how to recognize revenue in financial statements. Issued in 2014 and taking effect in 2018, the standard prescribes a new, five-step method all companies must follow to determine when and in what amounts to recognize revenue in financial statements.

Companies have two options for how to adopt the standard.... To get the full story, subscribe now.