New global accounting rules may have an effect on your firm
May 30, 2014

There are a number of industries that have rules that seem to change almost every day. For instance, doctors constantly have to contend with best practices, new forms, legalities and other restrictions, no matter their medical specialty. It's a similar case with lawyers, teachers and a number of other positions.

Accountants, however, don't often have to completely switch up their bookkeeping strategies. That's one of the positives about the sector - numbers are numbers, and the methods that these professionals use have been popular and efficient for years. Some may say that the start of the Digital Age changed things - firms overwhelmingly use accounting software now - but the basic tenets are the same.

However, that may be changing. The Financial Accounting Standards Board recently released a number of new laws that are set to affect firms no matter their location, size, focus areas and other demographics. What do professionals need to know about these tweaks?

Some time to comply
One of the best things about this new guidance is that the rules won't come into effect until 2017, The Wall Street Journal reported. The news source explained that the FASB has been working on these details for the last 12 years, in order to make accounting more uniform and in sync across the board.

It still might be worth it for accountants to learn the ins and outs of the rules now, so they can start to adapt methods to ensure they're comfortable training employees on the new regulations.

Revenue recording time will be shifted
The biggest changes will occur when an accountant records different types of revenue on the books. The details will depend on the industry the professional is working within.

For instance, a release from the FASB revealed that now, bookkeepers record the purchase of a vehicle and accessories as soon as the transaction is completed, even if that includes services - like maintenance - that aren't provided immediately. However, under the new rules, the services that will be rendered later will be accounted for in the books on that future date. 

Again, this varies by sector. The FASB noted that it's almost the opposite with software makers, who currently wait until later to put upgrades in programs on the books. Under the new rules, it will be considered easier to book that additional revenue upfront.

Nexus: G-WEBCD3