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May 1 — Jan Hauser, controller and chief accounting officer at General Electric Company, expressed concern about whether the estimated 30 months afforded by U.S. and global standard-setters for companies to apply new revenue reporting rules will be enough.
When the moderator of a panel of experts at the Baruch College conference discussion May 1 on the jointly written revenue recognition standards—which the Financial Accounting Standards Board and the International Accounting Standards Board expects to issue by May 31—suggested the Jan. 1, 2017 effective date for U.S. public companies affords a lot of time for those enterprises to get ready for implementation, Hauser offered a different viewpoint.
Hauser, General Electric's controller and chief accounting officer at the major multinational company, with a product and service line that is among the biggest and most varied of companies around the world, didn't agree with the moderator.
“I think we're going to need potentially more time than what we're being allotted in terms of, you know, implementing the standard,” Hauser said.
“We thought we would have had it out quite a while ago,” Hauser said of the forthcoming joint standard, “and had a lot of time.
“And particularly for companies that actually want to think about” carrying out full retrospective application of the forthcoming rules, “or immediate-change systems, or multiple industries, it's a huge undertaking,” added the GE executive, who also is a vice president at the Fairfield, Conn., based company.
Hauser, a former national partner with PricewaterhouseCoopers, said that as the FASB-IASB revenue recognition “transition resource group” begins to meet— which is planned for July— and starts studying issues, “maybe there'll be a greater appreciation of that.”
She predicted that the FASB “might get some commentary about needs” of companies and others in the financial reporting community.
The new, far-reaching standards are expected to have substantial impact on many commercial sectors. Another panel discussant, FASB Chairman Russell Golden, highlighted the significant effect the new rules will have on computer software companies, sellers of real estate, asset managers and wireless telephone companies.
Norman Strauss, a Baruch professor of accounting and host of the conference, said that “the FASB has kindly given us a while” to apply the new revenue reporting standard. The new rules could have far-reaching and deep impact for many companies, nationally and globally.
Scott Taub, managing director of Financial Reporting Advisors, LLC, Chicago, laid out the specific timetable for the new rules: public companies will begin following the standard in Jan. 1, 2017, including for interim disclosures. IASB will not require footnote reporting for quarterly or other interim periods.
Private companies will have until the end of 2018 to carry out the standard. Such companies do not have interim reporting requirements.
“There's a lot of time here,” said Taub, who formerly served as a deputy chief accountant and acting chief accountant at the Securities and Exchange Commission. “Whether it's enough time or not is up to the individuals who are evaluating it for their company.
“Certainly the boards have given a lot of time for adoption here,” he added.
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