FASB Approves Deferral of the Effective Date of the Revenue Recognition Standard

revenue recognitionOn July 9, 2015, the Financial Accounting Standards Board (FASB), the organization that sets accounting standards and rules for all public and privately held companies, approved the deferral of its new revenue recognition standard, Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers by one year. The ASU makes the new standard effective beginning with calendar year 2019 financial statements for private companies. ASU 2014-09 can, in some situations, significantly change how companies record their revenue, and is a long and complex document. This deferral gives private companies another year to implement these new rules.

The final ASU would permit both public and nonpublic organizations to adopt the new revenue standard early, but not before the original public organization effective date (i.e., annual periods beginning after December 15, 2016). We would not recommend early adoption of this standard.

For more information, contact Claudia Wolter, CPA, CCIFP, CCA at cwolter@katzabosch.com or 410.307.6438.

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