Armanino Blog
Article

SEC Provides Relief for Revenue Recognition Disclosures

by Matthew Perreault

The SEC recently made life a bit easier for companies that adopt FASB’s new revenue recognition standard, which takes effect in 2017 for public companies. 

The standard mandates retrospective adoption, requiring companies to either fully restate prior years (full retrospective), or record a cumulative catch-up adjustment to the opening balances in the current year (modified retrospective), with enhanced disclosures to explain how previous years would have looked under the new rules. 

SEC Regulation S-K requires companies that adopt a standard retrospectively to restate all five years of the selected financial data in SEC filings, so all follow the same basis of accounting. In September, at a Financial Accounting Standards Advisory Council meeting, an SEC staff member said the SEC wouldn’t object if full retrospective adopters apply the new standard to only the three years covered by audited financials (i.e. 2015, 2016 and 2017), instead of restating all five years of data. Companies must clearly disclose the reporting disparity to investors if they do not restate selected financial data for the earlier years (2013 and 2014).

October 16, 2014

Stay In Touch

Sign up to stay up-to-date with the latest accounting regulations, best practices, industry news and technology insights to run your business.

Author
Resources
More News and Insights
Getting on the SPAC Track:  2021 Outlook
Webinar
We’ve been through it - and we’ve got a few learnings to share about SPAC transactions!

February 18, 2021 | 10:00 AM - 11:00 AM PST
Webinars
Webinar
Enable sales growth with SOC automation, speed and preparedness.

February 3, 2021 | 11:00 AM - 12:00 PM PST
Webinars
Webinar
Celebrate Data Privacy Day One Day Early to Help You Stay One Step Ahead.

January 27, 2021 | 11:00 AM – 12:00 PM PST