Modifying Your Due Diligence Approach as a Result of the New Revenue Recognition Standard

The new revenue recognition rules have been in effect for public companies throughout 2018, and the impacts on revenue, income, and EBITDA for certain companies and industries are now transparent, giving a leg up for sponsors and private companies to better assess the impacts on their deals. Certain components of revenue are largely accelerated for companies in the technology and pharma industries, whereas revenue has been deferred for certain companies in the construction and business services industries. Each company and industry has its own facts and circumstances, and, in some cases, the pattern of recognition has not changed at all. Accordingly, acquirers should be considering the impacts of the changing models now as they look at prospective deals. Download our white paper to read more about how the new revenue recognition may affect your business.

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Lawson Smith Head of Accounting and Financial Reporting, Transaction Advisory Services

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