FASB Panel Proposes Delaying New Revenue-Recogniti
Post# of 17650
Posted On: 04/01/2015 7:26:58 PM
FASB Panel Proposes Delaying New Revenue-Recognition Rules by One Year -- Update
By Michael Rapoport
Companies will have an additional year to prepare for complex new rules on how they book their revenue under a proposal that U.S. accounting rule-makers announced Wednesday.
The new rules, currently slated to take effect in 2017, would be pushed back to 2018 under the proposal from the Financial Accounting Standards Board. Companies that are ready to adopt the new rules in 2017 would still be allowed to do so then if they choose, however.
The revenue-booking changes, which the FASB enacted last May, are intended to simplify and make more consistent how companies record their revenue. Under current rules, companies in different industries often record revenue differently and sometimes book portions of it well before or after the sales that generate it.
But the overhaul will mean significant changes for many companies: software makers and wireless-communications companies will speed up booking some of their revenues, for instance, while auto and appliance makers will see some of their revenues more stretched out. Some companies, such as Verizon Communications Inc., AT&T Inc. and Adobe Systems Inc., had asked the FASB for a delay, saying the 2017 effective date doesn't give them enough time to revamp their internal systems and procedures to start booking revenue under the new methods.
By Michael Rapoport
Companies will have an additional year to prepare for complex new rules on how they book their revenue under a proposal that U.S. accounting rule-makers announced Wednesday.
The new rules, currently slated to take effect in 2017, would be pushed back to 2018 under the proposal from the Financial Accounting Standards Board. Companies that are ready to adopt the new rules in 2017 would still be allowed to do so then if they choose, however.
The revenue-booking changes, which the FASB enacted last May, are intended to simplify and make more consistent how companies record their revenue. Under current rules, companies in different industries often record revenue differently and sometimes book portions of it well before or after the sales that generate it.
But the overhaul will mean significant changes for many companies: software makers and wireless-communications companies will speed up booking some of their revenues, for instance, while auto and appliance makers will see some of their revenues more stretched out. Some companies, such as Verizon Communications Inc., AT&T Inc. and Adobe Systems Inc., had asked the FASB for a delay, saying the 2017 effective date doesn't give them enough time to revamp their internal systems and procedures to start booking revenue under the new methods.
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