In May 2014, the accounting standards 'IFRS 15' and 'ASC 606' were released, which replace almost all existing IFRS and US GAAP guidance on revenue recognition. Both standards will become effective at the start of 2018.
The core principle of the new revenue recognition guidance is that companies recognise revenue when transfer of control occurs - either over-time or at a point in time.
These changes will have a pervasive business and accounting impact across all industries. Although some companies will have relatively few changes to the timing and amounts of revenue recognition, this will need to be fully assessed in order to support this conclusion.
Implementing the new standards presents challenges for many companies such as assessing whether or not systems, processes and internal controls are ready to capture the data needed for forming and monitoring new estimates.
With only a couple of years before the effective date, we can help you with: