By Steven Marcy
Feb. 22 — The Securities and Exchange Commission will consider the conclusions of the revenue recognition Transition Resource Group (TRG) to be practical guidance for implementing the new standard, the SEC's chief accountant told a securities law group.
The SEC will expect companies to adhere to the findings of the TRG—despite them not being authoritative pronouncements or standards issued by the Financial Accounting Standards Board or the International Accounting Standards Board, SEC Chief Accountant James Schnurr told the Practising Law Institute's “SEC Speaks” conference Feb. 20. The boards jointly formed the TRG in 2014 shortly after they issued the revenue standard .
“From a practice point from my office, we would expect a registrant to follow the guidance that comes out of those deliberations” of the TRG, Schnurr said.
“If a company chose to take a different approach” from what the TRG concluded, “we would expect them to come in and talk to us about why they were not following” what the TRG had found, Schnurr said.
Because the revenue recognition standard by FASB and IASB is “largely” converged, foreign companies filing under international financial reporting standards in the U.S. also should consult the minutes of the TRG group meeting and follow them in their filings or justify why they haven't, Schnurr said.
Schnurr noted that IASB has said it won't any longer send representatives to future TRG deliberations, three of which are tentatively scheduled for later this year. But Schnurr noted that IASB will monitor future TRG deliberations and has indicated that if something significant emerges from them, it will consider them.
After issuing the standard in 2014 , FASB and IASB both issued further authoritative implementing guidance. FASB said in January that it probably needs to issue further guidance on intellectual property licensing .
Schnurr said Feb. 20 he fears that many companies have fallen behind on installing the processes, internal control procedures and information technology devices needed to meet the implementation deadline, which is after Dec. 15, 2017, for public companies. Other SEC officials have indicated some companies mightn't be ready in time.
To contact the reporter on this story: Steven Marcy in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Laura Tieger Salisbury at email@example.com
For a general discussion of the new revenue standard, see 5098, The New Revenue Recognition Standard - Analysis & Application I, and 5099, The New Revenue Recognition Standard - Analysis & Application II, at 5098.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)