It’s here! The new revenue recognition standard, that is. I believe it is the most pervasive and across-the-board important topic that the Financial Accounting Standards Board and the International Accounting Standards Board could have tackled. This new standard eliminates the transaction and industry-specific guidance found in current U.S. GAAP and replaces it with a principle-based approach. Also, it applies to all public, private and not-for-profit entities. I implore you, no matter what your professional discipline, to pay attention to this new standard. And please, don’t get comfortable because the effective dates seem far off.
Are you sure the final words in the new standard are consistent with what you have been hearing to date about this project? Are you comforted in having specific revenue recognition rules replaced by a more principle-based approach? Are you confident that unwritten industry norms of accounting practice formed over decades are consistent with the new standard? In this video, AICPA Senior Technical Manager for Accounting Standards Kim Kushmerick provides an overview of the standard, in addition to highlighting key items to consider and helpful AICPA resources.