Excerpts from an article by Terry Sheridan in accountingWEB.com

It’s no secret that companies have dawdled in adopting the new revenue recognition standard. But a new study by Deloitte reveals that initial public offerings (IPOs) may suffer as a result.

Why? Because the new standard, ASC 606, will apply to all public companies for reporting periods after Dec. 17. Although nonpublic companies have until the end of next year to put the new standard in place, companies in the IPO process are subject to the public company deadline at the time of their IPO, Deloitte states in a public release.

Under the JOBS Act, some emerging growth companies with annual gross revenues of less than $1 billion undergoing an IPO can choose to delay adopting the new standard until the private company deadline, Deloitte states. But Deloitte also notes that doing that could put companies at a disadvantage to public companies that have already adopted the standard.

Here’s a snapshot of the survey’s findings:

• 60 percent of the respondents said they have not begun implementation of the standard or have only done an initial assessment.
• But 53 percent said IPO activity will increase modestly (46 percent) or substantially (7 percent) in the next year.
• 83 percent of respondents said it takes 12 months (40 percent) to 18 months (43 percent) prior to the IPO to put in place the structural and operations changes needed for a public offering.
• 49 percent of respondents said media, technology and telecommunications industries would attempt the most IPOs.

Read the full article in accountingWEB.com

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