The New Accounting Standard for Revenue Recognition: Do Implementation Issues Differ for Fortune 500 Companies?

• Published date: 01 April 2018
• DOI: http://doi.org/10.1002/jcaf.22330
• Author: Christine Jonick,Debra Benson
• Date: 01 April 2018

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© 2018 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI 10.1002/jcaf.22330

The New Accounting Standard

for Revenue Recognition: Do

Implementation Issues Differ

for Fortune 500 Companies?

Christine Jonick and Debra Benson

INTRODUCTION

In May 2014, the

Financial Account-

ing Standards Board

(FASB) and the Inter-

national Accounting

Standards Board

(IASB) jointly issued

a converged stan-

dard, Accounting

Standards Update,

Revenue from Con-

tracts with Custom-

ers (Accounting

Standards Update

2014-09, Topic 606).

The original imple-

mentation date was

January 2017 for pub-

lic companies who

apply U.S. Generally

Accepted Accounting

Principles (GAAP).

However, prepar-

ers reported imple-

mentation concerns

through the FASB’s

Transition Resources

Group, and this

resulted in a 2015

decision to delay the

adoption date one

year to allow time to

address these issues

(Financial Account-

ing Standards Board,

2017).

The new revenue

recognition standard

addresses issues of

consistency in report-

ing, disclosure, and

usefulness of infor-

mation. It is designed

to “(1) remove

inconsistencies and

weaknesses in exist-

ing revenue require-

ments; (2) provide a

more robust frame-

work for addressing

revenue issues; (3)

improve compara-

bility of revenue

recognition practices

The purpose of this study is to discover how a

sample group of Fortune 500 companies is pre-

paring for adoption of the new revenue recogni-

tion standard and how these companies expect it

will the impact their current operations. Existing

research involved large samples of public and

private companies of all sizes. This exploratory

investigation seeks to determine if Fortune 500

companies are experiencing different implemen-

tation timelines or issues as a result of their size. A

survey of chief accounting officers was conducted

to discover perceptions of how the new standard

will impact various aspects of their respective

companies. The study also reports the progress

that these companies have made in preparing for

and implementing the new revenue recognition

standard. Findings indicate that these companies

expect to change internal policies and procedures,

yet do not anticipate that the new standard will

impact product and services offerings. The results

of this pilot study, based on a relatively small

sample, begin to offer some insight into issues and

perceptions of large publicly-held companies and

can serve as a starting point for more extensive

research. © 2018 Wiley Periodicals, Inc.

Refereed (Double-Blind

Peer Reviewed)