Early Adoption of Topic 606 Revenue Recognition from Contracts with Customers
PublisherWashburn University. School of Business
SponsorKaw Valley Bank
MetadataShow full item record
How do companies make decisions on when and how to transition into newly issued accounting requirements? The two-year window for adopting Topic 606 Revenue Recognition from Contracts with Customers offers an opportunity to observe companies, using their financial statement notes from 2014 to 2017, in order to provide investors with information about changes in revenue recognition methods. Among the Standard & Poors (S&P) 1,500 companies, only ten companies were identified as early adopters, making this study a deep exploration into the transition paths chosen by these ten unusual companies, rather than a statistical comparison of early versus late adopters. By examining these ten companies, this study can identify evidence of the motivations that the accounting literature has documented in the study of other early adoption decisions.