Armanino Blog
Article

SEC Provides Relief for Revenue Recognition Disclosures

by Matthew Perreault
October 16, 2014

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
Related News & Insights
The Bridge BOOtique
Live Event
Join us for an evening of shopping while supporting nearly 50 local, women-owned businesses.

October 27, 2021 | 02:00 PM - 06:00 PM PT
VIP Networking Event at Topgolf
Live Event
Swing by for an evening of conversation, cocktails and food with fellow Dallas nonprofit leaders.

October 14, 2021 | 03:30 PM - 06:30 PM PT
Armanino’s VIP Event at Community Summit
Live Event
See you in-person alongside your Dynamics peers in Houston!

October 13, 2021 | 04:00 PM - 06:00 PM PT