Pivotal Time for Private Companies on Revenue Recognition

It’s clear that FASB’s new revenue recognition standard might not be first choice for private company’s finance. The standard takes effect for private companies for annual reporting periods beginning after Dec. 15, 2018, and interim periods within fiscal years beginning after Dec. 15, 2019.

Here’s what private companies can do to make sure they’re able to make an effective transition to the new standard.

Leaders of the operation will have to dig into their contracts to make decisions on whether they have different performance obligations that need to be treated separately or services that need to be broken out separately in their reporting. All the work implementation will be a major task for private companies.