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Revenue Recognition Resource Center
In 2014, the Financial Accounting Standard Board (FASB) issued a converged new standard on the recognition of revenue from contracts with customers: Accounting Standard Update (ASU) No. 2014-09, Revenue from Contracts with Customers. The new standard will soon be effective and replaces virtually all existing revenue recognition guidance within U.S. Generally Accepted Accounting Principles (GAAP). It also affects the accounting for certain transfers of nonfinancial assets to non-customers.
The new guidance will have wide-ranging effects and impact any organization — public, private, or not-for-profit — that recognizes revenues from contracts with customers. As such, every entity will need to understand how the new requirements will impact them, the type of information that will need to be aggregated for accounting decision-making and financial statement disclosure purposes, and may also need to incorporate mechanisms into revenue-related processes to aggregate the required information.
CohnReznick recommends starting transition activities now by following an eight-step process and taking full advantage of the time remaining to carry out each step and properly prepare for implementation.
Key Transition Dates:
- For public companies, the standard is scheduled to become effective for all annual reporting periods beginning after December 15, 2017.
- For nonpublic organizations, the standard should be applied to annual reporting periods beginning after December 15, 2018.
CohnReznick Insights
The Timing and Measurement of Recognizing Revenue Under Topic 606
Detailing the Five-Step Framework for Revenue from Contracts with Customers (Topic 606)
The Countdown to Revenue Recognition (Video Series)
Part 1 of 4: Overview and Getting Started
Part 2 of 4: Training & Education and Understanding Key Revenue Streams, Policies & Treatment
Part 3 of 4: Selecting a Sample of Contracts and Applying the New Standard
Part 4 of 4: Commencing Conversion and Implementing New Processes
New Guidance on Revenue Recognition — Impact to the Construction Industry
Hospitality Insights - Franchisors: Be Aware of How New Revenue Recognition Standards Affect Your Business
Subject matter expertise
Robert Hilbert
CPA, Managing Partner - Assurance
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