FASB Revenue Standard Has Little Impact on Google’s Finances
After adopting the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard one year before the 2018 effective date, Google is acknowledging that the standard has had little effect on its financial results. Google says that its recorded revenue for 2016 was $15 million less than it would have been if determined under the revenue rules prior to Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers.
Speaking on the matter at the June 27 Financial Executives International Conference in Philadelphia, Google’s Josh Paul said the revenue decrease seemed like a rounding error. Google’s director of technical accounting remarked that the process of switching to the new accounting requirements, however, was a major undertaking. He noted the new footnote disclosures that detailed revenue sources caused a significant workload. In addition, assisting executives with understanding the expanded revenue information and getting them comfortable with the additional disclosures required additional work.