If you’re reading this, you are already on your way to becoming well-versed on the newly converged revenue recognition standard announced last year.
Apparently, you’re one up on the person most responsible for your company’s financial standing in this regard, as well.
As was just covered in a CFO.com report, more than half of the tech firm CFOs who responded to a recent survey have yet to fully understand the new standard or its implications.
According to BDO USA, LLP’s annual survey of 100 U.S. technology CFOs, 57 percent of the finance chiefs haven’t familiarized themselves with the complex changes at hand.
These findings come in the wake of feverish reporting over the past several months that governing boards are giving consideration to a possible delay of the effective date of the new standard. Currently, the new revenue recognition standard, announced in May 2014 by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB), takes effect in 2017 as full replacement for existing U.S. generally accepted accounting principles (GAAP).
“Although the new revenue recognition standard’s effective date might be delayed, companies should be proactive about understanding the impact the new rules will have on their business,” said Ken Gee, assurance partner at BDO, an assurance, tax and consulting firm.
“Companies can take specific steps now to prepare by analyzing current revenue streams and understanding where there are potential differences between current practice and the new standard.”
Given these survey results, at least from a top down perspective, such efforts have yet to get much traction.
Other survey findings:
- Of the CFOs in the survey who consider themselves familiar with the new standard, 52 percent are still analyzing to understand the impact
- Only 20 percent of this same category of CFOs feel they are ready to implement
- And of those familiar, 18 percent plan to seek guidance for implementation issues