SEC Accountant Urges Vigorous Pursuit of Revenue Questions

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By Steve Burkholder

June 10 — Companies shouldn't delay raising questions they have about using new revenue accounting rules in hopes of prolonging current practices, a U.S. securities regulator warned.

Wesley Bricker, a deputy chief accountant at the Securities and Exchange Commission, said June 9 that “the time to escalate implementation questions is now” as a special advisory group of the Financial Accounting Standards Board prepares to meet, if necessary, later this year.

The longer a public company or industry group waits to raise revenue-reporting issues it sees, the greater the chance of diverse accounting arising or of “a potential correction in the financial statements,” Bricker said in a speech in Los Angeles.

FASB's 2014 rules on revenue recognition become effective in January 2018 (10 APPR 525, 6/6/14).

The FASB advisory panel, the Transition Resource Group for Revenue Recognition, is scheduled to meet July 25. It doesn't have any issues on its agenda yet and may not convene, a board member suggested July 9 at the same conference where Bricker spoke.

‘Let Me Caution You.'

The SEC deputy chief accountant and his boss, Chief Accountant James Schnurr, have repeatedly spoken about revenue recognition, Bricker said at the University of Southern California gathering on SEC developments and financial reporting issues. Schnurr and Bricker have attended Transition Resource Group meetings and follow standard-setting developments closely.

To the extent that companies, industry groups or “other constituents” have identified questions “but have chosen not to raise them in hopes of preserving their current accounting, let me caution you that auditors, regulators and others will look to understand those revenue policies,” Bricker said.

They also will gauge how the policies “are consistent with the principles in the new revenue recognition standard,” he added. “It's just a matter of timing as to when we gain that understanding, whether before or after companies implement the standard.”

Unwise to Wait

Bricker urged companies to proffer revenue accounting questions they have as the resource group prepares to convene again.

“The later a registrant or industry group waits, the less opportunity it has to weigh in on the outcome, and the greater the possibility of needing to narrow diversity” through later standard-setting “or, if the principles in the standard were not appropriately applied, through a potential correction in the financial statements,” said the SEC accountant.

Bricker to AICPA

Bricker also sent a speed-up-please message to the leaders of an effort by the American Institute of CPAs. A number of AICPA industry task forces on revenue recognition have been laboring to craft guidance and, as warranted, send questions to FASB's Transition Resource Group.

The SEC accountant said he is optimistic that key practice issues on revenue reporting that require standard-setting have been identified through the implementation work of companies, auditors and rulemakers.

However, he added, “I am concerned that other application questions have not yet been fully resolved by the AICPA industry groups or, if needed, presented to the TRG for resolution,” Bricker said June 9.

He encouraged “all constituents to communicate their views” in a timely fashion “so that investors, companies, auditors and regulators can understand and evaluate remaining implementation questions” raised by the prospect of the new revenue recognition standard.

Representatives of the AICPA couldn't be reached for comment June 10.

To contact the reporter on this story: Steve Burkholder, reporting from Los Angeles, at

To contact the editor responsible for this story: Steven Marcy at

For More Information

The text of Bricker's speech at the June 9 USC conference is available at

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