The New Revenue Recognition Standard: SEC, FASB and AICPA Urge Timely Implementation, Offer Guidance
The SEC, FASB and AICPA are all offering guidance for implementation of the FASB’s new revenue recognition standard, Revenue from Contracts with Customers (Topic 606), which will be effective for most public companies for annual reporting periods beginning after December 15, 2017, although early adoption is generally permissible. (A parallel standard, IFRS 15, applies under global accounting standards.) In a recent speech, SEC Chief Accountant Wesley Bricker noted that “a number of significant new disclosures” will be required under the standard, so he urges companies “to not wait until the end of the year before trying to get the data, systems, processes and controls in place to make these disclosures.”
One of the posted handouts for the FASB’s May 10 meeting notes that “the FASB’s staff and the SEC’s staff have been working together closely on implementation since the issuance of the revenue standard,” and lists several implementation resources. For its part, in anticipation of the new standard, the AICPA has formed a Revenue Recognition Working Group and 16 industry task forces to develop guidance. The specific issues each industry group is addressing can be found here. The lesson for all companies is that the time to prepare is now, and resources are available.