The American Institute of CPAs has been producing guidance for how different industries can deal with the new revenue recognition standard that will be taking effect at the end of the year, along with the distinct issues they will be facing.

A working group at the AICPA representing the eight largest accounting firms has been looking at the issues identified by industry-specific task forces and seeing whether those issues need to be dealt with by the AICPA’s Financial Reporting Executive Committee, or FinREC, or the transition resource group set up by the Financial Accounting Standards Board and the International Accounting Standards Board.

“It is a big project, and a big area of concern for the profession,” said FinREC chair Jim Dolinar, a partner with Crowe Horwath.

While the revenue recognition standard is mostly principles-based, rather than rules-based, that doesn’t mean particularly companies and industries won’t have questions about the particular rules.

“Many people like the detailed guidance,” said Dolinar. “How does this broad-based principle apply to me? That’s where I think the value comes in from the AICPA’s project, in providing the guide that covers 16 different industries.”

The eight accounting firms involved in the working group audit the vast majority of public companies and are in a good position to see what kinds of issues they might face in adjusting to the new standard, which takes effect at the end of this year for public companies and at the end of next year for private companies.

“We’re in crunch time right now,” said Dolinar. “We really need to start crunching through things to make sure we’re in a positon to be as helpful as we can.”

Kim Kushmerick, senior technical manager and revenue recognition project manager at the AICPA, said one of the first exercises for the industry task forces was to think about what types of industry-specific questions or topics they thought should be raised and would be helpful for their industry when applying the revenue recognition standard, also known as Topic 606 in the FASB Codification.

“Throughout this process, we had a master list of all the different issues and the status of the different issues,” she added. “The industry task forces develop the topics, draft the papers and put them together. Then they go to the rev rec working group, which has the eight accounting firms and a couple of other people from big companies and industry. They discuss the issues with the objective to make sure they are staying consistent with the principles of 606.”

At this point, over 75 percent of the industry topics have been discussed by the rev rec working group, she noted.

“Our push right now is that by the end of the first quarter we’re going to have the remaining industry issues be seen and discussed by the rev rec working group,” said Kushmerick. “So we’re going to have comfort in knowing that we have the eight largest accounting firms in a position to know what the remaining issues are that the task forces are working on, what direction they’re going in, and that they’re really comfortable with the direction they’re going. We’ll be at a good point at the end of the first quarter.”

Earlier this month, the AICPA issued a new Audit and Accounting Guide on Revenue Recognition, and the AICPA plans to update it as new issues arise and are settled by the task force (see AICPA releases revenue recognition guide). FinREC also issued working drafts at that time of the accounting issues identified for four industries: aerospace, defense, telecommunications and the timeshare real estate sectors.

Throughout 2017, as the AICPA finalizes guidance for different industries, the AICPA plans to release updates to the revenue recognition guide, according to Kushmerick. The upcoming updates will include sectors such as gaming, health care, and not-for-profits. A summary of the status of the various issues industry by industry is available here.

Michael Cohn, editor-in-chief of AccountingToday.com, has been covering business and technology for a variety of publications since 1985.