For broker dealers, transitioning to the new principles-based, five-step process for recognizing revenue sharply contrasts with the current rules-based, industry-focused GAAP standards you've been used to.
The new guidance governs the recognition of revenue from contracts with customers and requires extensive preparation, process changes, and training.
Since broker dealers are considered public business entities, adoption of the new revenue recognition standard is January 1, 2018, and may impact your January 2018 focus report findings.
Key topics about revenue recognition for broker dealers include:
- Implementation timeline
- Reporting considerations, such as:
- Identifying performance obligations in a brokerage contract
- Capitalizing contract costs
- Gross vs. net revenue reporting changes
- Additional disclosures
- Changes to internal controls
Implementation of revenue recognition for broker dealers is here. Download our Revenue recognition resource guide for broker dealers to ease the transition.