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Sept. 15 — Public companies need to start preparing immediately for the implementation of new rules on revenue recognition, accounting rulemakers said.
Financial Accounting Standards Board Vice Chairman James Kroeker said that he was struck by the “pretty high” percentage of companies that haven’t begun to adopt the standard—as signaled by the results of a polling question put to participants.
The 2018 effective date is coming up rapidly, “[s]o if you haven’t begun” start now, he suggested. He said that if the webcast was “your first step in the adoption process, I would encourage you to keep that momentum up and get moving as quickly as possible.”
Kroeker made his comments at a Sept. 15 FASB webcast collectively produced by the International Accounting Standards Board.
Speakers in the Sept. 15 webcast, including IASB member Mary Tokar, stressed the importance of enhanced disclosures under the new standard. Tokar advised companies not to leave the footnote disclosure changes until the last minute.
FASB tentatively plans to hold a Nov. 7 meeting of its advisory Transition Resource Group for Revenue Recognition, but it isn’t clear whether or how that meeting will be conducted.
The new standard—jointly written over some 10 years by FASB and IASB—could have significant impact on several commercial sectors, including telecommunications (12 APPR 16, 8/12/16), computer software, media and entertainment, and biotechnology and life sciences. Although top-line revenue might not change much in some industries, the accounting processes likely will (12 APPR 16, 8/12/16). Companies will also likely have to retool their information technology divisions to meet the requirements of the standard.
More than 49 percent of the more than 1,500 people who monitored the FASB webcast identified themselves during the educational webcast as preparers of financial statements—that is, accountants or financial executives at companies.
Asked about how much progress they had made in implementing the new standard, 24 percent said that they haven’t yet started the process. Almost 25 percent of respondents stated that they had recently started implementation and 18 percent answered that they had made significant progress, according to polling results provided to Bloomberg BNA by FASB.
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The Sept. 15 archived version of the webcast and update on implementation of the revenue standard will be available for 180 days at http//src.bna.com/iDF
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