As of January 1, 2019, private companies are required to comply with new revenue recognition rules designed to make accounting more transparent and uniform across industries. For public companies, the rules became effective with their first quarterly report in 2018. Private companies were given an extra year to comply. In practice, many private companies have almost another year to catch up to the standard because they only produce annual audited financial statements.
Some private companies may be dragging their feet. While it is technically possible to comply at year-end, waiting may not be the best option. This article describes three reasons why.