US standard setter FASB has voted to delay the effective date of new rules around revenue recognition by one year.
Private and public companies have been given an extra year to prepare for the new standard, which overhaul the way businesses record revenue on their books – and is one of the biggest changes to accounting rules in more than a decade.
The standard setter had set out plans in January to delay the start date.
Following the results of staff research and outreach regarding the effective date of the new standard, which FASB converged with global accounting standard setter the IASB last year, companies will now have until reporting periods beginning after 15 December 2017 to implement the standard.
The core principle of the new common global standard, which replaces the fragmented set of rules by which companies in different industries booked their revenues differently, is for companies to recognise revenues in a way that shows the transfer of good and services to customers that reflects the payment to which the company expects to be entitled.
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