A Head Start: A Practicum for Clients Dealing with the New Revenue Guidance.

• Author: Peterson, Paul J.
• Position: Regulation preparation

he implementation date for the new revenue recognition standard for nonpublic companies is quickly approaching. While public companies had to adopt the standard for 2018, nonpublic companies had an additional year to implement--and that time is running out, so they should be starting the process of implementing the new standard to be ready when 2019 gets here.

Education

The first step is to educate your clients on the new standard. Let them know that, because this is such a universally applicable standard, most organizations will be affected.

The FASB has a webpage for implementation guidance for major standards (fasb.org/implcmentation) with educational materials available on the revenue recognition standard. Included on the page is the Accounting Standards Update itself, for those clients interested in digging into the hundreds of pages of text. More beneficial may be the archived webcasts on the standard and certain industry-specific webcasts. The FASB has similar pages available for other upcoming standards and accounting challenges, such as leases, credit losses, not-for-profit financial reporting, hedge accounting and the Tax Cuts and Jobs Act.

The AICPA also has resources through its Financial Reporting Center (aicpa.org/interestareas/frc/accountingfinancialreporting/revenuerecognition.html), which has information that can be shared with clients on understanding the standard and developing an implementation plan. Additionally, there are links to the various industry task forces that the AICPA developed to address transition issues.

There were 16 industry task forces that addressed implementation issues for specific industries. Each of these resulted in a chapter in the AICPA's Audit and Accounting Guide: Revenue Recognition, which is another valuable resource. Any clients in these industries should, at a minimum, consult that chapter in the guide: aerospace and defense, airlines, asset management, broker-dealers, construction contractors, depository institutions, gaming, health care, hospitality, insurance, nonprofit, oil and gas, power and utility, software, telecommunications and timeshare.

Additionally, major accounting firms have an implementation guide, as well as other resources available to the public on their websites. It only makes sense to leverage the best and brightest in our profession when facing such a challenging issue.

What Can a Client Afford?

Now that your client has an understanding of the task at hand, it's time...