Revenue Recognition: The Clock Is Ticking
Dec 21, 2016
On December 21, 2016, CFO Magazine released an article by Eric Knachel, senior consultation partner in Deloitte & Touche LLP’s national office accounting services in Stamford, Conn, where he discusses how the new revenue recognition standard has implications that extend far beyond accounting.
Although the transition requirements for the new revenue recognition standard are different between IFRS 15 and ASC 606, in the article, Mr. Knachel mentions that the new accounting standard for revenue recognition will likely affect every aspect of a business that relates to revenue, from a company’s financial results and compliance with debt covenants to executive compensation. Yet surveys show that many companies are dragging their feet and have yet to begin preparing for this impending change, which means some may be dangerously behind.
There are five key areas that companies will need to address as they implement the new revenue recognition standard.
- Accounting
- IT systems
- Legal (contracts)
- HR (staffing and training)
- Compensation
Review the article on the CFO Magazine's website.
