Which accounting standards are shown as examples that may be delayed in adoption?

Which accounting standards are shown as examples that may be delayed in adoption?

• A. Topic 606 Revenue Recognition and Topic 842 Leases
• B. Topic 404 Liabilities
• C. Topic 320 Investments
• D. Topic 520 Marketing

Answer: (A)

The main idea here is that some accounting standards are so expansive and change-soaked that firms may choose or need to delay adopting them to manage risk, data needs, and system overhauls. Topic 606 Revenue Recognition and Topic 842 Leases fall into that category: they overhaul how revenue is recognized across performance obligations and how leases appear on the balance sheet, requiring widespread changes to contracts, billing processes, IT systems, and internal controls. Because the scope touches virtually every part of a business, a delayed or phased adoption is a practical option for many entities, especially in industries with complex arrangements like construction and real estate. The other topics listed aren’t typically cited as the prime examples of adoption delays. They either don’t represent the same sweeping, organization-wide implementation challenges, or they aren’t in practice discussed as the standards most likely to be postponed.

The main idea here is that some accounting standards are so expansive and change-soaked that firms may choose or need to delay adopting them to manage risk, data needs, and system overhauls. Topic 606 Revenue Recognition and Topic 842 Leases fall into that category: they overhaul how revenue is recognized across performance obligations and how leases appear on the balance sheet, requiring widespread changes to contracts, billing processes, IT systems, and internal controls. Because the scope touches virtually every part of a business, a delayed or phased adoption is a practical option for many entities, especially in industries with complex arrangements like construction and real estate.

The other topics listed aren’t typically cited as the prime examples of adoption delays. They either don’t represent the same sweeping, organization-wide implementation challenges, or they aren’t in practice discussed as the standards most likely to be postponed.