Revenue Recognition: New Rules Will Mean Major Changes

 

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The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have issued their long-awaited converged standard on revenue recognition.

The rule governs how and when revenues can be recognized in different industries. In essence, the new rule will do away with current industry-specific accounting and instead apply a single set of principles to all revenue transactions. Accounting experts say there are potentially significant changes coming for certain industries, and some level of change for almost all entities. This article explains what financial managers should be concerned about and what kind of impact these rules will have on industry accounting standards.

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