With the Financial Accounting Standards Board considering a delay in implementation of the new standard on recognizing revenue from contracts with customers, a new survey has found that more than half of technology company CFOs have not yet even familiarized themselves with the changes.
FASB staff members have been preparing a report on a possible deferral amid complaints from some companies that they need more time to revamp their practices and systems to put the new standard into effect. The report is expected to be presented to the board early in the second quarter.
BDO USA’s annual survey of 100 U.S. technology CFOs may add some fuel to the fire.
In addition to finding that 57% of the tech company CFOs are still unfamiliar with the new standard, BDO reported that 52% are still analyzing the impact. Only 20% are ready to implement the new revenue recognition standard and 18% say they are looking for guidance on various implementation issues.
Companies filing under GAAP have to implement the new standard for reporting periods beginning after December 15, 2016. Companies that use IFRS have a Jan. 1, 2017, implementation date, but can also choose to adopt the standard earlier.
According to BDO, 86% of tech CFOs are most likely to implement the new rules under the prospective approach and apply the new standard to transactions initiated after the implementation date instead of restating their prior periods’ financial results.
“Although the new revenue recognition standard’s effective date might be delayed, companies should be proactive about understanding the impact the new rules will have on their business,” Ken Gee, assurance partner at BDO and member of AICPA’s Revenue Recognition Working Group, said in a news release.
“Companies can take specific steps now to prepare by analyzing current revenue streams and understanding where there are potential differences between current practice and the new standard,” he added.
In other results from the survey, 67% of CFOs increased their spending on cyber security measures during the past year, with the most common action being implementation of new software security tools.
Twenty-four percent of tech CFOs cited policy and tax changes as the main obstacle to overall business growth, and 41% believe the U.S. tax system hinders their ability to effectively compete in the global marketplace.