Accounting Firms Ready Guidance for New Revenue Recognition Standards
Jamil sees an important role for the large firms, especially in helping clients decide how to go about making the transition. “I think the major firms, including BDO, will play a constructive role in terms of sharing our insights and guidance with our clients,” he said. “While the implementation date is 2017 or 2018, depending upon which transition method these companies adopt, there at least three choices available. If you apply it on a full retrospective basis, then for the analysis that needs to be done in the period in which you are not officially reporting under this new GAAP, there will be a requirement for you to keep that analysis going, so when you do adopt it, if you are on a retrospective basis you can adjust your historical financials under the new guidance. From that standpoint there’s not a lot of time left for those companies to start putting in place the new controls, practices, policies and training of their internal staff, not only from the accounting side, but within the business operations side as well. How you go about doing business and how you negotiate your contracts are going to be critical in implementing the new standards as the new rule is very much based on what the contractual rights and obligations are, and when you have the disposition of those rights and obligations.”
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