Thursday, June 12, 2014

New Rule will Affect Businesses

A new rule was recently passed that will change the way companies record revenue. The rule, passed by the U.S. and global rule makers, won’t go into effect until 2017, but many business owners are already gearing up for the changes it will bring about.

Under the rule, many businesses will need to change the rate at which they book different parts of their revenue. The total revenue will likely stay the same, but performance results could fluctuate due to the new timing that will be in effect.  


While many businesses have mixed feelings about the new rule, experts feel that it will help to prevent accounting fraud, which is often committed by speeding up or putting off reporting of revenue. They also believe it will make revenue reports more true to the rate at which companies are providing the goods and/or services that generate that revenue.


Is your business prepared for this change? If you need help getting ready or simply understanding how the change might affect you, talk with your business CPA. If you don’t have a CPA, then find one at Susan S. Lewis, Ltd. of Naperville.

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