In a move only a company as massive as Microsoft would consider making, the company is planning to offer a set of restated financial statements on Oct. 1 that reflect its early adoption of both of the Financial Accounting Standards Board’s two major new standards, the rules covering revenue recognition and lease accounting.

To date, only a handful of public companies have chosen to adopt the revenue recognition or lease accounting standards early. To attempt to do both would test the resources of even the most well-staffed finance and accounting departments.

Yet on July 1 the company officially adopted the two new accounting standards, according to an 8-K filing on Thursday. Starting with the quarter ending September 30 — Microsoft’s first quarter of fiscal year 2018 — the company will issue financials that include restatements for 2016 and 2017 required for its early adoption of the rules.

The net effect of the changes on the company’s income statements and balance sheets will be material, Microsoft reported. For example, revenues for 2017 and 2016 will rise about $6 billion each. For those two years, the assets for those two years will rise by about $9 billion, while liabilities will fall by about $6 billion and $2 billion, respectively. The company said that the accounting changes wouldn’t materially affect its cash-flow statements.

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The reason for the moves is twofold, Microsoft chief accounting officer Frank Brod explained during a special financial disclosure call with analysts yesterday. “We chose to adopt the new standards early, primarily to simplify the communication of our results by eliminating the need for non-GAAP revenue reporting,” he said.

“We have also chosen to early adopt the new leasing standard in order to provide one set of restated financial statements to investors,” he added.

Regarding revenue recognition, the biggest material change to Microsoft financials reported under generally accepted accounting principles stems from a move to booking Windows 10 original equipment manufacturer (OEM) revenue upfront.

“Since the launch of Windows 10 in July of 2015, we have been providing non-GAAP measures to exclude the impact from Windows 10 OEM revenue deferrals from our results,” said Brod. (In a change from previous versions of Windows, Microsoft released Windows 10 as an ongoing “service” rather than issuing frequent updates when there were changes in the versions.)

“Under the current standard, we provide investors non-GAAP measures that exclude the impact from Windows 10 OEM revenue deferrals to aid in their understanding of our performance. Under the new standard, we will no longer need to provide this revenue adjustment, and we’ll report revenue solely on a GAAP basis,” he added.

Under the new standard, software revenue must be recognized upfront, and revenue related to the value of ongoing obligations, like software updates, must be estimated and deferred.

In calculating the revenue it will report under the new standard, Microsoft has chosen to use the full retrospective method, requiring the company to restate fiscal years 2017 and 2016 “to provide greater comparability for the readers of our financial statements,” Brod said.

As a result of adopting the new lease accounting standard, Microsoft will see a net increase in assets and liabilities of $6.6 billion as of June 30, 2017, and a net increase in assets and liabilities of $5.2 billion as of June 30, 2016. The company “will now record our operating leases related to data centers, offices, research and development facilities, retail stores, and various equipment under the operating lease right-of-use assets, other current liabilities, and operating lease liability lines in the balance sheet,” Brod said.

Companies must begin applying the new revenue recognition standard for annual reporting periods beginning after Dec. 15, 2017, with the option to have adopted it as early as Dec. 15, 2016. The FASB’s new leasing standard is effective for public companies for interim and annual reporting periods beginning after December 15, 2018. Companies are allowed to adopt the lease accounting rules as early as they want.

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