Revenue Recognition for Construction, Engineering, and Professional Services
With current and upcoming changes to how you report revenue, it may be possible for the construction, engineering, and professional service industries to more accurately report revenue, instead of the subjective ‘progress on the job’ method.
For example – even if your firm is 10% complete with the cost, it might not reflect the actual appropriate revenues.
Recent changes by the Financial Accounting Standards Board (FASB) / International Accounting Standards Board (IASB), to the U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) in 2017 and 2018 will shape how these three industries report their revenues. These changes require organizations to re-evaluate how contracts for services are negotiated with customers.
If your firm is not yet prepared for these upcoming changes, you are not alone. The new standards impact a wide swath of businesses, both nation-wide and globally. Tax implications that accompany the new requirements, make it critical for your firm’s financial health that you are up to date and ready.
When it comes to making the necessary changes, Palazzo, Inc consultants are available to assist with process design and implementation.