The accounting bodies, FASB and IASB keep themselves abreast of modern changes in the business areas and keep releasing new standards to conform to the business transactions, most recently being converged revenue recognition standards related to customer contracts (ASU 2014-09 and IFRS 15, respectively).

The revenue standard’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. Entities will generally be required to make more estimates and use more judgment than under current guidance, which will be highlighted for users through increased disclosure requirements.