Revenue Recognition From Contracts With Customers
Consideration of New Rules on Financial Institutions
Beginning in 2018, new rules go into effect for "revenue recognition from contracts with customers". The purpose of this article is to explore the impact of this new requirement (Accounting Standards Update 2014-09, Revenue from Contracts with Customers) on the contractual arrangements between financial institutions (FIs) and their customers and how and if FIs may have to change their accounting in key areas. Although there is a general presumption among FIs that the new recognition rules will be a non-event for them, we suggest each institution take a look at the areas that the new rules apply to, and make sure they are appropriately following the recognition requirements.
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