New standards demand new approaches
Many companies will have to adjust their models to account for new accounting standards that will alter when and how revenue is recognized, starting as soon as January 2018.
Under the new framework, revenue will be recognized at the time goods or services are transferred to customers. All companies applying IFRS must follow the required guidelines, and in certain cases the changes will be significant and require careful planning. Organizations will need to:
- Identify the contract
- Identify separate performance obligations
- Determine transaction price
- Allocate transaction price to performance obligations
- Recognize revenue when performance obligation is satisfied
BDO’s Revenue Recognition team is versed in how these imminent changes will affect our clients’ businesses. Utilizing the resources of our global accounting and consulting network, and insight from our most experienced partners, we are able to translate how these revenue recognition changes will affect our clients at home and abroad. Clients are also served by BDO’s expertise in a range of industries, and the specific ways in which IFRS will affect them.
We continue to follow IFRS developments closely and provide real-time updates.