No More Hitting the Snooze Button on Revenue Recognition

We realize you’re busy, but that doesn’t mean you can keep hitting the snooze button on the Financial Accounting Standards Board’s (FASB) accounting standards that will soon come into effect for everyone. The accounting standard that needs your attention right now is the new revenue recognition model, issued as FASB ASU 2014-09 with subsequent amendments.

Public entities are well underway with adoption of the new revenue recognition standard, as the new guidance is effective for interim and annual periods in 2018. Private companies still have some time as the guidance is effective in 2019 for annual reporting periods, and in 2020 for interim periods. This is a wakeup call, and not an opportunity to hit the snooze button yet again.

It’s important to remember this guidance supersedes the revenue recognition requirements in FASB ASC 605, Revenue Recognition, and most industry-specific revenue recognition guidance. Additionally, it also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts.