This industry-specific supplement to our In depth highlights some of the areas that could create the most significant challenges for aerospace and defense entities as they transition to the new standard.
Note: Since issuing the new revenue standard in May 2014, the FASB and IASB have proposed various amendments to the guidance. This In depth has not been updated to reflect all of the proposed changes. See In transition US2015-08, The new revenue standard — changes on the horizon, for a summary of the changes, their impact, and the areas where the FASB and IASB have taken different approaches.
On May 28, the FASB and IASB issued their long-awaited converged standard on revenue recognition. Almost all entities will be affected to some extent by the significant increase in required disclosures. But the changes extend beyond disclosures, and the effect on entities will vary depending on industry and current accounting practices.
This industry-specific supplement to our In depth highlights some of the areas that could create the most significant challenges for entities in the Aerospace and Defense (A&D) industry as they transition to the new standard. These areas include, but are not limited to, contract modifications, transfer of control, and contract costs.
For a comprehensive analysis of the new standard, read In depth: Revenue standard is final – A comprehensive look at the new model.