Revenue Recognition: A Comprehensive Look at the New Standard
Since 2008, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board have been working jointly on developing a single converged model for recognizing revenue. The boards felt a common standard on revenue for U.S. generally accepted accounting principles and international financial reporting standards was critical toward achieving a single set of high-quality global accounting standards. FASB’s objectives in undertaking this project were to remove inconsistencies and weaknesses in existing requirements, provide a more robust framework for addressing revenue issues, improve comparability across companies, industries and capital markets and provide more useful information to users through enhanced disclosures. After two exposure drafts and years of deliberations, the boards completed their joint project on revenue recognition and Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), was issued on May 28, 2014. The new principles-based standard substantially replaces all existing guidance for recognizing revenue, including more than 200 pieces of industry-specific guidance, and will require more estimation and greater use of judgment than current guidance. While all entities will be affected by the new standard, FASB Chairman Russell Golden noted that construction and real estate, software, telecommunications and asset managers will see the most change.
Revenue Recognition Resource Center
The new dedicated revenue recognition page on bkd.com brings you the most up-to-date resources to help you understand the new standard and provide insights on implementation and transition issues. The page includes all of our BKD Thoughtware™ on the topic, including alerts, white papers, webinars, external videos and presentations, to help you assess the potential effects on your organization. You’ll also find contact information for dedicated industry professionals.