Revenue Recognition Standard

In May 2014, the Financial Accounting Standards Board (FASB) and the International Accounting Standards 

Board (IASB) issued their much-anticipated converged standard on revenue recognition. The FASB issued 

Accounting Standards Update (ASU) No. 2014-09, and the IASB issued International Financial Reporting 

Standard (IFRS) 15, both titled “Revenue From Contracts With Customers.” With only minor differences, the

joint standard represents a single, global, principles-based revenue recognition model. The new guidance 

will affect almost every entity that recognizes revenues from contracts with customers, so financial executives with manufacturers and distributors should begin to gain an understanding of the new standard

The far-reaching impact of the new revenue recognition standard will affect different industries in different 

ways. To be ready when the new guidance goes into effect, financial executives need to understand the 

potential effects of the coming changes and determine the best way to implement the new guidance in their 

organizations.