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New Revenue Recognition reporting standards receive agency attention

Members of the FASB and IASB have been travelling the world, educating busines

Two major accounting standards agencies are attempting to calm any fears businesses may still have regarding the implementation of new revenue-recognition rules.

The Financial Accounting Standards

Two major accounting standards agencies are attempting to calm any fears businesses may still have regarding the implementation of new revenue-recognition rules.

The Financial Accounting Standards Board and the International Accounting Standards Board are preparing to embark on a grassroots-style campaign to address concerns regarding the "Revenue from Contracts with Customers" standard with far-reaching implications for revenue management, according to CFO.com. The new standard is designed to prevent similar companies with similar transactions from reporting significantly different results. Under the new policy, some companies might be able to recognize revenue earlier than they now do, if they are reasonably assured of continued payment for delivery of goods or services.

An initial comment period on the proposed rule elicited more than 1,000 responses. The second comment period, which ended March 13, drew just 50. Still, the FASB and IASB are determined to allay any fears before the January 1, 2015, implementation, CFO.com reports. The agencies have gone so far as to send project leaders around the world to educate reluctant parties about the changes and how they fit under the converging revenue recognition principle(s) of the two Boards.

During the last week of March, FASB and IASB staff were in Brazil and Malaysia discussing the new rules. According to CGMA Magazine, the presenters held meetings regarding industry-specific applications of the standard.

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