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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