Use GAAP? New revenue recognition standards may apply

Description

Abstract: New revenue recognition standards, more formally known as Revenue from Contracts with Customers, will affect not just public companies, but also the many private companies whose lenders or investors require them to follow Generally Accepted Accounting Principles (GAAP). This article discusses the goals of the new standards, including the aim of shifting from a rules-based to a principles-based approach. The article points out that companies that use GAAP need to be aware of these new standards, which likely will affect their financial statements, tax obligations and loan agreements — and may require changes to accounting processes and IT systems.