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Include Reimbursable Expenses in Revenues for 2002: FASB
The Financial Accounting Standards Board (FASB) is implementing, with no public comment period, a material rule change on revenue recognition that will significantly affect the consultancy industry. Specifically, at the November 14/15th meeting of the Emerging Issues Task Force (EITF) of FASB, the EITF announced that reimbursable expenses from customers must be included in revenue, beginning in 2002. Demand management consultancy Inforte has discussed this issue with many contacts in the investing and consulting communities, all of whom agree that the rule will lessen the quality of reported financial information for hundreds of companies and lead to even more pro forma reporting. Inforte has called for the EITF to delay implementation of the ruling at that meeting for at least three months to allow for public comment. Kennedy Information Consultants News
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