Last month we noted an increase in Calcbench subscribers searching for disclosures about filers’ efforts to implement the new revenue recognition standard, slated to go into effect in December.
Perhaps those subscribers were clairvoyant—because in the last several weeks, numerous SEC officials have given speeches talking about the importance of disclosing your implementation efforts. Get on this, people!
First, SEC Chief Accountant Wes Bricker gave a speech on May 4 covering a range of subjects, with revenue recognition at the top of his list. Bricker began by acknowledging that many companies are at least trying to move ahead with implementation: “We understand that some companies might be behind schedule in their implementation progress, [and] I want to acknowledge the many companies that have been working very thoughtfully through their implementation and that have made significant progress on their implementation plans.”
Then again, a few sentences later Bricker warned, “My message today is simple – I would continue to urge companies to not wait until the end of the year before trying to get the data, systems, processes, and controls in place to make these disclosures.”
Bricker also said that his minions in the Office of the Chief Accountant would fan out to the financial reporting conference circuit, hitting those same points throughout 2017. Just days later, one such minion, OCA Accounting Fellow Sylvia Alicea, gave more remarks at a Bloomberg BNA conference on revenue recognition.
Alicea’s speech is long and detailed; revenue recognition enthusiasts will want to read the whole thing. For our purposes today, Alicea said the following about transition disclosures:
The main point of these speeches is that the SEC still has some unease about what companies are disclosing. Even if the standard itself won’t lead to a material change in how or when your firm recognizes revenue, the required disclosures within the standard might be material anyway. (For example, companies will need to disclose more about contracts with customers, since revenue will now be recognized as a series of “performance obligations” that you fulfill for them.) And SAB 74 requires companies to disclose what they are doing to prepare for those disclosures they will start making in 2018.
Calcbench can help subscribers with fast, easy access to disclosures your peers are making on this implementation journey. Read our previous posts to see how that works. Read the SEC speeches to confirm that, yes, they are watching, and they expect answers.
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