Defining Issues  |  July 2017

SEC grants relief for private company financial information included in a public company’s filing

KPMG updated its June 15 Defining Issues to report that the SEC staff has granted relief from the early adoption of ASC 606 and ASC 842 for certain private companies. This is only applicable to private companies that meet the definition of a public business entity (PBE) solely because their financial statements or financial information is included, or required to be included, in another entity’s filing with the SEC.

Applicability

An SEC registrant with:

  • A significant private company equity method investee
  • A potentially significant acquisition of a private company after January 1, 2018

Relevant dates

Please download the report for more information:

Investor

Investee

Filing status

Registrant

Registrant

Registrant

EGC

EGC

EGC

Effective date

2018

2018

2018

2018 or 2019

2018 or 2019

2018 or 2019

Filing status

Registrant

Not a Registrant

EGC

Registrant

Not a Registrant

EGC

Effective date

2018

2018 or 2019

2018 or 2019

2018

2018 or 2019

2018 or 2019

Key impacts

  • The SEC staff has said it will not object if a PBE, that otherwise would not meet the definition of a PBE except for a requirement to include, or the inclusion of, its financial statements or financial information in another entity’s filing with the SEC, uses private company adoption dates for ASC 606 and ASC 842.
  • The announcement applies only to this narrow group of PBEs and is only available to the application of the revenue and leases topics and does not extend to other new FASB ASUs.

Report contents

  • Applicability
  • Key facts and impacts
  • Public business entities
  • SEC staff announcement
  • Investments accounted for under the equity method
  • Investor’s equity method pickup
  • Differing adoption dates and transition methods
  • Emerging growth companies (EGCs)
  • Acquired businesses
  • Other accounting standards

Related content

 

 

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