Happy New Year! While 2018 officially began for us accounting scribes once the New Year’s Eve hangover faded away, a majority of accounting and finance departments celebrated the start of the new year several months ago. Many companies’ 2018 fiscal year first quarters began last fall, but the process of planning key accounting and finance […]
Perhaps I’m reading too much into it, but this guy thinks everyone needs to start freaking out over the new revenue recognition rules: “Revenue recognition feels like a big, big issue,” said Zuora CEO Tien Tzuo, whose company specializes in software for managing subscriptions. “This feels as big or bigger than Y2K or SOX. SOX […]
CPA exam scores were released today, so it only seems appropriate that we conclude our four-part series featuring snazzy dresser and GAAP oracle Tim Gearty. If you’ve been holed up in a fallout shelter for the past few weeks, go catch up on Parts I, II, and III. Double-o Gearty wraps things up with allocation […]
The third installment of Accounting for Stuff With Tim Gearty is here. For round 3, TG tackles the transaction price within the new revenue recognition rules. You can check out Parts I and II if you’ve been under a rock at the bottom of the ocean. Now, you might think you already know everything there […]
Back with round 2 of Tim Gearty’s overview of the new revenue recognition rules. Go catch up on Part I, if you’re late to the party. (But don’t worry, you’re never late to the party.) This time Lord Gearty covers the separation of performance obligations. So pay attention, you’ll learn something. Stay tuned for more on […]
Lots of accountants are in a mad dash to learn the new revenue recognition rules that go into effect later this year. Going Concern has teamed up with CPA review legend Tim Gearty to present a series of videos to help educate you on the new revenue recognition rules without combing through the FASB website. […]
This morning, troubled drug company Valeant announced a restatement and that its CEO Michael Pearson would be stepping down. This all started, you may remember, last fall when reports from the Southern Investigative Reporting Foundation and Citron Research published reports questioning Valeant's relationships with pharmacies, accounting, etc. etc. and it culminates with this. Oh, who […]
Marvell Technology Group's audit committee launched an investigation into the company's revenue recognition policies last September. They didn't find any funny business but did learn that “internal controls were not fully followed,” “revenue was recognized prematurely for some transactions,” and the real bombshell: The committee also said there was "significant pressure" on sales and finance […]
IBM disclosed an investigation into its revenue recognition today but isn't worried too about it: In a statement on the investigation, IBM defended its accounting practices as “rigorous and disciplined,” adding that it is “confident that the results and information we report have been appropriate and consistent with GAAP,” or Generally Accepted Accounting Principles. The […]
After releasing its proposal to delay its revenue recognition rule back in April, the IASB received 100 comment letters and "virtually all" of them supported the idea. Today, they went ahead and pushed it back to 2018. Hope everyone's happy. [WSJ]
Knowing us, you can guess where we're going with this. We're not writing a how-to guide on the new revenue recognition rules, which brings us straight to our first thing you need to know: there are folks in the know available to walk you through it. #1: A transition resource group is here to help […]
Anyone else sick of this topic? Did you ever really care? Just go ahead and do what you have to do already, FIASB: The top line on financial statements around the world is about to change. And companies need to move quickly to determine which personnel will be responsible for implementing the new revenue recognition […]
Considering the lengths that some companies go to manipulate massage their revenue, this passage from Tesla's Shareholder letter is rather refreshing: During Q1, we consistently produced 400 or more Model S vehicles per week, for a total of over 5,000 during the quarter. We recognized 4,900 vehicles as revenue, exceeding our initial Q1 guidance of 4,500, […]
The aim is for companies across the world to recognise revenue consistently as part of wider efforts to forge a single set of global acccounting rules to help investors. The core principle that a company must recognise income from contracts when it transfers the goods or services to the customer remains unchanged. But the proposal has been simplified in parts and contains more guidance after several sectors like construction and telecoms raised concerns. “Our proposals will give analysts and investors the confidence that revenue is being presented on a consistent basis, across industries and continents,” IASB Chairman Hans Hoogervorst said in a statement. “We plan to conduct additional outreach with interested parties during the comment period to help people understand the proposed guidance and to listen to any remaining concerns,” said FASB Chairman Leslie Seidman. [Reuters]
Because, god, wouldn’t that be awkward?
The International Accounting Standards Board (IASB) and the US-based Financial Accounting Standards Board (FASB) agreed today to re-expose their revised proposals for a common revenue recognition standard. Re-exposing the revised proposals will provide interested parties with an opportunity to comment on revisions the boards have undertaken since the publication of an exposure draft on revenue recognition in June 2010.
It was the unanimous view of the boards that while there was no formal due process requirement to re-expose the proposals it was appropriate to go beyond established due process given the importance of the revenue number to all companies and the need to take all possible steps to avoid unintended consequences.
Sir David Tweedie admits that, “It is important that we get this right, first time,” and “the boards and staff have undertaken an unprecedented level of outreach to get us to this point, and why we are keen to treble-check that our conclusions are robust and can be implemented with minimal disruption.”
Maybe I’m reading too much into that statement but it sounds as though the Boards may be trying to stave off more nasty letters.
[via FAF/IFRS Foundation]
Back in September, Vermont-based Green Mountain Coffee Roasters put the world on notice that the SEC was asking some questions about their revenue recognitions policies. Despite the SEC Q&A, analysts we’re cool with the company and the GAAP the crunchy accounting group was putting out.
Also at that time, the company disclosed that there were some immaterial accounting errors that were NBD. That was until they dropped a little 8-K on everyone last Friday!