The prospect of preparing for a historic, game-changing revenue recognition standard at a huge, global public company is a bit daunting for GE Technical Controller Russell Hodge, CPA.
“I’ll admit to it being a little bit overwhelming to us,” Hodge said. “We have $150 billion of revenue and so many diverse, different business models. It’s a tough question. It’s a tough thing to think about.”
The new, converged revenue recognition standard that’s in the final stages of development by FASB and the International Accounting Standards Board is expected to lead to at least some changes in financial reporting for virtually all entities that use U.S. GAAP or IFRS.
When this issue of the JofA went to press, the boards were scheduled to release the standard in the first quarter of 2014. In December, Hodge and other panelists at the AICPA Conference on Current SEC and PCAOB Developments described in detail some of the changes companies may face in moving from the industry-specific guidance in U.S. GAAP to one principles-based standard.
Christopher Bolash, CPA, a partner in EY’s Financial Accounting Advisory Services practice, encouraged CPAs to start thinking about the standard even before it is issued. He urged companies to build a project team and a plan, and to take inventory of major revenue streams so they will be ready to begin implementation when the final standard is issued.
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Source: Ken Tysiac (www.journalofaccountancy.com)
