Another aerospace and defense company has early adopted the new revenue recognition accounting standard, and this one says the new accounting will lead to a reduction in its reported revenue.

General Dynamics Corp. filed its 10-K for fiscal 2016 and reported it is adopting the new revenue recognition standard effective Jan. 1, 2017, a year earlier than all public companies are required to follow the new five-step method for determining when and in what amounts they should recognize revenue in financial statements. As the company issues quarterly results throughout 2017, the revenue will be flowing into the company at a slower rate than it has under current accounting, according to the company’s disclosures.

That’s different from the effect reported earlier by Raytheon, another aerospace company that is adopting the standard in 2017. Raytheon, the first company to announce definitively it was adopting the standard early, said it did not expect a material impact to financial statements as a result of the new approach to revenue recognition.

General Dynamics has four major business units, each of which will be affected differently by the new accounting because of differences in contracts with customers. The company says the majority of its long-term contracts will continue to recognize revenue and earnings over time, as the work progresses, because of the continuous transfer of control to the customer. That won’t be true for all of its contracts, however, deferring some revenue compared with the way it is recognized under current standards.

Based on an analysis of General Dynamics’ reported numbers in financial statements and footnote disclosures about adopting the new standard, Audit Analytics says the company’s transition to the new accounting will produce a cumulative effect of reducing revenue by $480 million. The firm says the company’s disclosures suggest revenue for fiscal year 2016 ultimately will be reduced by $792 million.

The biggest change for the company appears to originate in its aircraft business, where revenue for the manufacture of a fully outfitted aircraft will not be recognized until the customer is delivered a completed airplane. Under current accounting, the company is able to recognize revenue at certain milestones throughout the manufacture even before a given aircraft is completely built, but that goes away under the new accounting standard.

The change in accounting also affects how the company can recognize profits, the 10-K reports, producing some variability in how earnings will be reported. Despite the variability, overall cash flows and profitability will not be negatively affected by the accounting.

The company devotes some substantial text in its 2016 year-end report explaining how financial statements will look in the coming year when investors get their first look at the numbers following the new accounting. That’s the kind of disclosure the Securities and Exchange Commission has told companies it expected to see as companies got closer to the adoption of the standard. Experts have cautioned they believed many companies have not made adequate progress toward adopting the standard.

Aerospace and defense companies have generally been among the leaders in working through the new revenue guidance. The aerospace task force at the American Institute of Certified Public Accountants has identified more than a dozen implementation issues specific to its industry sector and has settled 9 of them, more than any other AICPA task force.

The AICPA is producing an Audit & Accounting Guide on Revenue Recognition, and the aerospace and asset management task forces are among the earliest to have their completed guide content published. The AICPA working group managing the task forces recently released two more drafts for public review and comment, these from the insurance and the software task forces. As each of the 16 industry-specific task forces works through their issues, the content will be assembled into updated editions of the accounting and auditing guide.