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

Published date01 April 2018
DOIhttp://doi.org/10.1002/jcaf.22330
Date01 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)

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