Agency Discovers Revenue Standard to Significantly Impact Software Companies
Moody’s Investor Service says the Financial Accounting Standards Board’s (“FASB”) long-awaited revenue recognition standard will have a significant impact on the software industry. In a report issued on November 14, the credit rating agency found that the FASB’s standard will allow for faster recognition of revenue for numerous software companies. The result, according to Moody’s Vice President and Senior Accounting Analyst David Gonzales, is a drastic shift in revenue. Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers (Topic 606), introduces a streamlined method wherein most companies must disclose the top line in their financial statements. This method replaces several. Read More.
Topics: Accounting Standards Update, FASB, Financial Accounting Standards Board "FASB", Revenue from Contracts with Customers (Topic 606), Revenue Recognition, Software, Software Industry, vendor specific objective evidence "VSOE"
Revenue Recognition Working Drafts Issued for Nine Industries
Earlier this month, the American Institute of Certified Public Accountants’ Financial Reporting Executive Committee (“FinREC”) issued 20 working drafts of interpretative guidance for implementation issues related to the Financial Accounting Standards Board’s Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers. The working drafts offer industry-specific examples for implementing the revenue recognition standard, and pertain to the following sectors: Aerospace and Defense Airlines Broker-dealers Engineering and Construction Contractors Gaming Health Care Asset Management Nonprofits Software Comments on the working drafts must be submitted by Thursday, September 1.
Topics: Aerospace, Airlines, Asset Management, Broker-Dealer, Engineering and Construction Contractors, Financial Reporting Executive Committee "FinREC", Gaming, Health Care, Nonprofits, Revenue Recognition, Software
CAQ Study Shows Big Drop in Financial Restatements
Evaluating financial restatement trends over the ten-year period after the Sarbanes-Oxley Act’s (SOX) implementation, the Center for Audit Quality (CAQ) recently released the findings of its study, Financial Restatement Trends in the United States: 2003–2012. Authored by University of Kansas Professor Susan Scholz, the report focuses on restatement activity that was disclosed by U.S. Securities and Exchange Commission-registered filers. Per Scholz’s analysis and findings, it was determined that financial restatements have dramatically decreased over the years. Major takeaways from the report include the following: Contributed to the implementation of SOX Section 404 internal control reporting, restatement announcements reached its peak. Read More.
Topics: Audit, Banking, Center for Audit Quality "CAQ", Chemicals, Energy, Financial, insurance, Internal Control Reporting, Mining, Restatement, Sarbanes-Oxley Act "SOX", Software, Technology, U.S. Securities and Exchange Commission "SEC"