The basic objective of financial reporting is to provide financial information about the reporting entity that is useful to present and potential equity investors, lenders and other creditors in making decisions (Kieso et al., 2012). Information must be relevant and faithfully represent what really happened or existed. Furthermore, there are basic concepts on how to recognize, measure and report financial statement elements and events. The governing bodies for the accounting practices, known as generally accepted accounting principles (GAAP) or international financial reporting standards (IFRS), include the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). The accounting practices for shipping firms (particularly vessel owning and operating firms) are unique to the character of the maritime business. Although the FASB and the IASB promulgate the way a transaction should be recorded, managers have some discretion in applying the standards. The FASB and the IASB have initiated a joint project to clarify the principles for recognizing revenue and to develop a common revenue standard for US GAAP and IFRS. The FASB amends the FASB Accounting Standards Codification and creates Topic 606, Revenue from Contracts with Customers while the IASB issues IFRS 15 (also Revenue from Contracts with Customers). Both regulate the revenue recognition mechanism and provide principles for reporting relevant information about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers (e.g. charter parties). The standard replaces International Accounting Standard (IAS) 18 “Revenue” and IAS 11 “Construction contracts”, and it is effective since January 1, 2017 (earlier application is voluntary) (IFRS, 2014). We ask the following research questions: What does this new standard mean for the maritime industry? How does this standard impact financial and operational management of shipping firms? A critical component of the new requirement is the establishment of performance obligations to determine when revenue is earned. Shipping companies and their customers, through their contracts, will need to define “objective” milestones to clarify the degree of completion of service. These milestones, also known as performance obligations, will determine the timing for recognizing revenues through the period of service. Difficulty in applying this new standard for financial reporting arises when a shipping contract covers many services, each of which may not be separately delineated as to revenue earned under the contract. Further, the portion of the revenue related to each service must be recognized only when the service is complete.