New Accounting Standard
Recognition: Implementation Planning
for the Construction Industry
Speaker: Dusty Stallings
Member, AICPA FinRec Revenue
Recognition Task Force
Who should attend: Contractors, sureties, bankers, accountants, software
companies, insurance agents, and others serving the industry
Date: June 14, 2016
Location: Courtyard by Marriott, 4 Sebethe Drive, Cromwell,
Time: 7:30 am - Registration & breakfast; 8:00
am - 10:30 Program
Cost: $40.00 - Members; $50.00 - Non-members
The FASB issued their
long-awaited converged standard on revenue recognition. Almost all entities
will be affected to some extent by the significant increase in required
disclosures. But the changes extend beyond disclosures, and the effect on
entities will vary depending on industry and current accounting practices.
Entities in the engineering
and construction industry applying U.S. GAAP or IFRS have primarily been
following industry guidance for construction contracts to account for revenue.
These standards were developed to address particular aspects of long-term
construction accounting and provide guidance on a wide range of
industry-specific considerations including:
The new revenue standard will
replace the construction contract guidance and substantially all existing
revenue recognition guidance under U.S. GAAP and IFRS. This includes the
percentage-of-completion method and the related construction cost accounting
guidance as a standalone model.
The standard seems similar to
existing GAAP, however, the implementation is much more complicated than many
have assumed. Analysis is required, additional information will need to be
obtained for disclosure and information systems and related controls will
require modifications. This standard will change revenue recognition on the
financial statements, but not how you bill the owner. Income tax construction
accounting regulations are not changing. Accordingly, contractors will need to
continue to provide the same information as you do today to serve the customer
and prepare income tax returns, but now must capture the information to follow
generally accepted accounting principles.
The program will provide an
overview of the standard and its implication to the construction contractor.
The focus of the program will be on the implementation issues observed at
companies currently adopting the standard and what you should be thinking about
as the standard’s effective date approaches.
CFMA Rev Rec 6.2016.pdf