Companies slow to start revenue recognition implementation
More than three-quarters of U.S. companies still have not attempted to quantify how their financial statements will be affected by the new revenue recognition standard that was issued in May 2014, according to a new survey.
FASB and the International Accounting Standards Board (IASB) worked together to create the new revenue recognition standard, which is designed to enhance comparability across jurisdictions and industries.
Based on concerns voiced by preparers over implementation difficulties, the boards agreed earlier this year to defer the effective date of the standard by one year. Some preparers have not been in a rush to work on implementation, according to the survey of 335 U.S. companies by PwC and the Financial Executives Research Foundation.
Seventy-eight percent of respondents said their companies have not attempted to quantify the financial statement impact of the new standard. More than one-fourth (27%) have not even started an initial impact assessment in their implementation efforts.
One reason for the delay may be the still-fluid status of the standard. FASB and the IASB have proposed—but not finalized—clarifying changes to the standard based on implementation concerns expressed by preparers.
As the boards work out those issues, 14% of respondents said they are waiting for clarification on accounting topics with respect to the standard, and 13% are waiting for finalization of the proposed amendments.
Dusty Stallings, CPA, a member of PwC’s professional services group, said that although the standard is “moving around a little,” it’s mostly done. She advised companies not to wait on implementation. Read more on the Journal of Accountancy.