For Contractors, Revenue Recognition Standards Come Back to Reality
No, the sky isn’t falling. Like a heavily anticipated major hurricane that thankfully veered out to sea, the upcoming revenue recognition standards are not expected to be the dramatic game-changer for the construction industry that was originally expected. In November 2011, the Financial Accounting Standards Board (FASB) re-issued their exposure draft on Revenue Recognition for Contracts with Customers (Topic 605). The reissued draft was in response to more than 1,000 comment letters from the industry and the accounting profession, as well as other stakeholders. The proposed standards, as revised, are conceptually in line with the goals of standardizing revenue recognition reporting across industries (in a principle-based approach), while retaining many current construction industry practices. To read more about the May 2013 Update, please click here.