Revenue recognition – Get ready for big changes

Description

Abstract: In June 2010, the Financial Accounting Standards Board and the International Accounting Standards Board issued exposure drafts proposing a new joint revenue recognition standard as part of their project to converge U.S. and international accounting standards. It’s not yet certain when the new rules will take effect, but public companies must begin to evaluate the impact of the proposed standard. This article discusses details of the proposal, while a sidebar offers one example of a company’s goods and services that, under the proposal, would be distinct and, therefore, accounted for as separate performance obligations.