Proposed changes to revenue recognition would have a profound impact on accounting, operations and IT systems. Compared to current practice, revenue and cost recognition may change as it relates to the timing and the amount recognized. Some companies will be affected more than others, but all companies should expect some level of change. Therefore, companies should begin assessing the implications of the proposal on existing contracts, technology and processes.
This article summarizes the key provisions of the "Revenue recognition" exposure draft, including specifics for the most-impacted industries and impacts to existing IT infrastructure. It includes a self-assessment questionnaire to help companies understand the potential impact to their organization. It was originally written for Financial Executives International.