Spring 2015 issue of Horizons

Communication with users of an entity’s financial statements is also a key part of the transition plan. Those users should be prepared for any expected changes in financial statement amounts as well as an increased level of footnote disclosures. Examples Applying New Guidance ASU 2014-09 contains 63 examples as illustrations of how an entity might apply the new guidance. Additionally, the FASB and the IASB have also established a Transition Resource Group in order to aid transition to the new standard. The Transition Resource Group will inform the FASB and the IASB about potential implementation issues that could arise when entities implement the new standard and will provide stakeholders with an opportunity to learn about the new standard from others involved with implementation. The Transition Resource Group will not issue authoritative accounting guidance. The AICPA has also formed sixteen industry task forces to help develop a new Accounting Guide on Revenue Recognition. This guide will provide helpful hints and examples on how to apply ASU 2014-09. Some of the industries involved with developing the new guide are construction contractors, gaming, hospitality, not-for- profit, software and telecommunications. There are real implications of the new revenue recognition standard and there is no doubt that effort is needed to ensure a successful implementation. RubinBrown is ready to assist you in this process. We will also be offering future seminars to provide helpful information on implementing the new guidance.

Suggested Revenue Recognition Timeline

Step 1. Assign individual company staff or form a task force to become experts and take the lead on understanding and implementing the new revenue recognition standard (2015) Step 2. Evaluate the changes from current GAAP to the new revenue recognition standard and evaluate the impact on your company (2015-2016)

Step 3. Determine how you will retrospectively adopt the new revenue recognition standard (2015)

Step 4. Determine whether any changes will need to be made to IT systems or software applications to capture needed information (2015) Step 5. Determine what interim disclosures will need to be made before the revenue recognition standard is effective (2015-2016) Step 6. Develop an evolving project plan for implementation of the revenue recognition standard and facilitate training for your staff (2015-2016) Step 7. Educate key stakeholders on the new revenue recognition standard and what changes to expect in your company’s financial statements (2015-2016)

Excerpted, Copyright 2014, American Institute for CPAs. Used by permission.

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