The Financial Accounting Resource Center™ is a comprehensive research service that provides the full text of standards, the latest news from the Accounting Policy & Practice Report ®,...
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.
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.”
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 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 email@example.com
To contact the editor responsible for this story: Steven Marcy at firstname.lastname@example.org
The text of Bricker's speech at the June 9 USC conference is available at https://www.sec.gov/news/speech/bricker-remarks-35th-financial-reporting-institute-conference.html
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 email@example.com.
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 firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)