A joint proposal by the US Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) may change the timing and amount of revenue recognition for technology companies. No change comes without challenge. The proposal, designed to improve consistency and comparability in financial reporting across international borders, may have implications for people, processes, and systems. However, the proposal also presents an opportunity to influence the development of a new converged revenue recognition standard. Companies may strategically seek out ways not only to simplify current revenue recognition accounting but also to take advantage of future contract changes or negotiations to ensure that they are aligned with the proposal.
This publication is designed to help executives understand the potential impacts of the proposal on their businesses, identify challenges and opportunities, and encourage active participation in the standard-setting process by responding to the board’s proposals. PricewaterhouseCoopers (PwC) is currently formulating its global response and is planning to submit a comment letter on the proposal.
