New Standards for Revenue Recognition Announced
After four year of deliberations, two exposure drafts and thousands of letters from industry and the accounting profession, the topic Revenue Recognition for Contracts with Customers has been accepted by both the FASB and IASB.
The new standards will entail significant changes from the current standards, which have been in effect since 1981. Public companies will have until 2017 and private companies will have until 2018 to implement the new standards. Overall, the most recent amendments provided needed clarification on certain issues and established the transition dates and methods. The Construction Financial Management Association (CFMA) recently published “Revenue Recognition—It’s a Wrap!” explaining the changes from the exposure draft issued in November 2011. The final pronouncement is expected in the second quarter of 2013.