New Accounting Standard Implementation

For most new standards, we recommend beginning the impact assessment at least six to twelve months before the effective date. That timeline provides enough runway to understand how the standard affects your specific contracts and transactions, select the adoption method, update policies, calculate the transition adjustment, and prepare the required disclosures. Companies that begin too close to the effective date often end up with a technically correct adoption that is poorly documented and creates unnecessary audit friction.

Under the full retrospective method, all prior periods presented in the financial statements are restated as if the new standard had always been applied. Under the modified retrospective method, the cumulative effect of adoption is recognized as an adjustment to opening retained earnings in the year of adoption, without restating prior periods. The full retrospective method provides period-over-period comparability but requires significantly more effort. The modified retrospective method is less disruptive but results in financial statements that are not fully comparable across the adoption period.

The required disclosures vary by standard but typically include: the nature of the change in accounting principle, the transition method elected, the effect of the change on individual line items in the financial statements, the reasons why the change is preferable (for voluntary changes), and the cumulative effect of the change on retained earnings. Many standards also require disclosures in the periods before adoption describing the new standard and management’s assessment of its expected impact. We prepare all required disclosures as part of every implementation engagement.

New standard adoptions are a focus area for external auditors — they review the impact assessment, test the transition calculations, evaluate the updated accounting policies, and assess the completeness and accuracy of the required disclosures. A well-prepared implementation with clear documentation significantly reduces the audit effort associated with the adoption. Conversely, a poorly prepared implementation — even if technically correct — creates audit findings and delays. We structure our implementation work to support the audit review directly.

The FASB regularly issues new standards and updates to existing guidance. Currently relevant areas include improvements to segment reporting disclosures, income tax disclosures, and disaggregation of income statement expenses, among others. We monitor the FASB’s standard-setting activity and can provide a current assessment of emerging standards that may affect your financial statements. The earlier you understand what is coming, the better positioned you are to implement efficiently.

Yes. We regularly work with foreign private issuers and companies with cross-border structures, including IFRS reporting, US GAAP reconciliations, and multi-entity consolidations for companies with domestic and international subsidiaries.

In most cases, we can begin within a few days of finalizing our agreement. Our onboarding process is straightforward — a brief discovery session, a clear statement of work, and secure access setup. We do not have lengthy intake procedures that delay the start of actual work.