Understanding the economic consequences of adopting new accounting standards is important to standard setters, the investment community, and accounting researchers. While much research has provided evidence on the (net) benefits of adopting new accounting standards, the costs of implementing new accounting standards are not well understood. Leveraging the recent adoptions of ASC 606 (on revenue recognition) and ASC 842 (leases) and a novel dataset of corporate job postings, we document that accounting jobs that require knowledge and skills to implement these new accounting standards pay substantially higher salary than other accounting jobs, controlling for job seniority levels and firm fixed effects. This “salary premium” is particularly pronounced in the first three years following the issuance of the new standards and gradually tempers off, consistent with the dynamic of labor demand and supply. We also document a spillover effect to non-accounting jobs. Overall, we provide large-sample evidence on an implementation cost of adopting new accounting standards.

zcarol2@ceibs.edu