Impact Of The New Revenue Recognition Standard

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Impact of the New Revenue Recognition Standard
Internship Course
Caleb Cartledge
4/11/15

Change is on the horizon and many companies are scrambling trying to figure out how the New Revenue Recognition Standard will impact the way that they conduct business. The prospect of bracing for a game-changing revenue recognition standard at a larger global firm is a daunting task. GE Technical Controller Russell Hodge, CPA, commented about this stating, “I’ll admit to it being a little bit overwhelming to us. We have $150 billion of revenue and so many diverse, different business models. It’s a tough question. It’s a tough thing to think about.” (http://journalofaccountancy.com/Issues/2014/Mar/revenue-recognition-20149444.htm) With experienced well-known firms such as GE being concerned, it shows that even the most experienced companies are concerned with how the new standards will fundamentally change the way that they conduct business. The main purpose of this essay is to explore how the new revenue recognition standard will effect different industries when it comes to fruition in 2017. The secondary purpose of this essay is to discuss ways that these different companies can mitigate risk by effectively preparing for these changes by using preventative controls.
For readers who are unfamiliar with the topics discussed above, The Financial Accounting Standards Board recently issued a new set of standards governing revenue recognition. The new standards will take effect on
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