Are you ready for the new revenue recognition rules?
Abstract: New rules are poised to take effect that could fundamentally change how many in the real estate industry will account for their revenue. Public companies must apply Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, in 2018, while compliance for private companies that follow U.S. Generally Accepted Accounting Principles (GAAP) begins in 2019. This article summarizes guidance covering the five steps a company must follow to determine when to properly recognize revenue on its financial statements. A sidebar provides some helpful examples of how developers can assess whether a performance obligation is satisfied at a point in time or over a period of time.