Microsoft (MSFT) has confirmed that it will move to all-GAAP​ (generally accepted accounting principles) reporting in its new fiscal year, following in the footsteps of other technology companies including Alphabet's Google (GOOGL), Facebook (FB) and Workday (WDAY).

During a conference call, the Redmond, Washington-based giant outlined its plans to switch to the preferred accounting standard, warning listeners that the changes will materially impact its financial results. To assist in the process, Microsoft provided some insight into how the new revenue recognition rules will impact its numbers. That included restating financial results for the fiscal years 2016 and 2017 to make it easier for investors to understand how GAAP accounting alters previously reported figures, as well as providing a platform to compare future results.

Microsoft’s move to GAAP came several months before it will become compulsory. By January 1, 2018, all public companies will be required to adopt the new method, which is being introduced to create uniformity in how listed firms recognize revenue in financial statements. 

In many cases, customers tend to pay more in the later years of contracts. However, under the new accounting practices, companies will be forced to account for future revenues more evenly, spreading them out over the full period of the contract. This generally means that companies will report higher sales earlier, lifting revenues and profits in the short-term.

During the conference call, Microsoft claimed that the impact of GAAP on its revenues will be material, particularly as license fees for Windows 10, which are spread out over a number of years, are recognized upfront. Microsoft previously used non-GAAP​ adjusted figures to ease the impact of software revenue deferrals.

Amazon (AMZN) has emerged as another company that will soon be forced to recognize some of its revenues sooner. Under the new accounting rules, the company said that sales of electric devices from non-Amazon stores, together with partially unused gift cards, will now have to be recognized earlier, according to the Financial Times.

The Financial Times article, which featured a quote from Zuora CEO Tien Tzuo warning that Wall Street analysts might have difficulty correctly analyzing restated numbers, added that GAAP accounting will have a different impact on car-booking services such as Lyft and Uber. (See also: Uber Loses, Amazon Wins Under New Financial Rules.)

Uber’s revenues are predicted to fall by more than half when it adopts the new standards, as the ride-hailing service will only be able to calculate commissions from regular and carpool rides as revenue. Based on these changes, Uber’s first quarter revenue of $3.4 billion would fall to $1.5 billion. (See also: Uber Is Considering GE CEO Jeff Immelt for Top Role.)

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