On May 28, 2014, the Financial Accounting Standards Board and the International Accounting Standards Board issued “sweeping, generally aligned standards on revenue reporting that were 12 years in the making,” according to an article in Bloomberg BNA.
These new, jointly written standards will become effective for public companies in 2017. In the U.S., private companies and nonprofit organizations will have an additional year to implement the rules.
The new rules affect “any entity that either enters into the contract with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards.”
The new U.S. and international accounting standards are intended to offer a comprehensive guide for companies and non-profit enterprises on how to report revenue, which has been a been a long-time problematic area of accounting for boards.
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