On May 28, 2014, the Financial Accounting Standards Board (FASB) issued new guidelines for revenue recognition, affecting most public and private businesses. Although improving many inadequate revenue recognition practices, the new standards introduced more complexity into an already complicated system. Professional services organizations are impacted the most and struggle to enact these new measures.
As Denis Pombriant of Beagle Research explained to Forbes, “We have before us a perfect accounting storm, the likes of which has not been seen since the late 1990s.”
To comprehend these changes and how they impact businesses, it helps to start from the beginning:
