The new revenue recognition guidance may constitute the biggest accounting change the world has seen in over a decade, because revenue recognition informs a wide array of business decisions. Technology companies that start preparing for the change now will be in the best position to seize the opportunities that will come with the change—while also surmounting the challenges.
On July 9, the FASB decided to delay the effective date of the new revenue standard by one year. Download: In brief: FASB finalizes one-year deferral of the new revenue standard
Although the effective date for the new revenue recognition standard may seem far off, companies most affected by the change should start preparing now. For technology companies currently following US GAAP, the impact of the new standard will be especially notable. This is especially true for businesses in subsectors that have specialized guidance or industry practices, such as software and semiconductors. Like many huge changes, the standard will bring both opportunity and challenge.