Released in May 2014 by FASB and IASB, the new revenue recognition standard (also known as ASU 2014-09) replaces virtually all existing U.S. GAAP revenue guidance with a single model. Your top line won’t be significantly different, but your manufacturing business will face challenges and changes. We partnered with the National Association of Manufacturers to survey more than 100 public and private manufacturing companies and gauge their readiness to adopt the upcoming rules. This infographic shows the most important findings. - See more at: http://gt-us.co/1sBcZsv

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About the survey
In June 2014, Grant Thornton LLP and the National Association of Manufacturers
partnered to survey 114 U.S.-based manufacturing companies about the new
revenue recognition guidelines. Respondents are executives from public (47%) and
private manufacturing companies (53%). These companies have revenues of less
than $100 million (30%), $100 million to $500 million (22%), $501 million to
$2 billion (20%), and more than $2 billion (29%).
47+THE 5-STEP MODEL
for the new revenue recognition standard
The mechanics of switching to the
NEW REVENUE RECOGNITION RULES
2 in 5 think it will take their company at
least 6 months to adopt the new rules
(1 in 3 are unsure about the timing)
Identify a contract
with a customer
Identify
performance
obligations
Determine the
transaction price
Recognize revenue when/as
performance obligation(s)
are satisfied
Step 1
Allocate the transaction
price to the performance
obligation
Step 2 Step 3 Step 4 Step 5
We partnered with the National Association of Manufacturers to
gauge the industry’s readiness to adopt the upcoming revenue rules.
MANUFACTURERS:
• Are unsure how the new standard will affect their business
• Think that the new rules will not simplify accounting
87%
Accounting
65%
Internal
processing
51%
IT
43%
Internal
controls
BUSINESS AREAS TO BE AFFECTED THE MOST
by the new revenue recognition rules:
Disclosures 17%
Performance obligation identification 14%
Revenue recognition 13%
Transaction price allocation 11%
4 of the most time-consuming
implementation steps...
are unsure what
transition method
they will use
2 in 3 say that the new rule adoption
cost will be moderate or insignificant
(1 in 4 are unsure of the cost)
1 in 2 don’t plan
to hire external help
for transitioning to
the new standard
66%
New revenue recognition rules
Uncertainty muddles manufacturers’ outlook
Public
companies
Jan. 1, 2017
Private
companies
Jan. 1, 2018
Timeline for
adopting the
new rules: