SEC updates revenue guidance

The SEC amended guidance for issuers to reflect the adoption of ASC 606. The SEC amendments are consistent with and do not change the new revenue model issued by the FASB.

Applicability

SEC Release Nos. 33-10402; 34-81428; IC-32784

SEC Release Nos. 33-10403; 34-81429; IC-32785

SEC Staff Accounting Bulletin No. 116

• SEC registrants adopting FASB ASC 606

Effective dates

Mandatory effective dates and early adoption provisions:

Annual periods:

For public business entities the effective date for annual periods is the fiscal years beginning after Dec. 15, 2017.

For all other entites the effective date for early adoption is the fiscal years beginning after Dec. 15, 2018.

Interim periods:

For public business entities the effective date for interim periods is the fiscal years beginning after Dec. 15, 2017.

For all other entites the effective date for interim periods is the fiscal years beginning after Dec. 15, 2019.

Early adoption:

For public business entities the effective date for early adoption is the fiscal years beginning after Dec. 15, 2016.

For all other entites the effective date for early adoption is the fiscal years beginning after Dec. 15, 2016.

Key impacts

The SEC updated revenue recognition guidance for issuers adopting the new revenue standard. In particular, the SEC:

• Updated its guidance for bill-and-hold arrangements, indicating that after adoption of the new revenue standard, registrants should refer to the new standard’s bill-and-hold criteria.
• Stated that, under the new standard, manufacturers for the Vaccines for Children Program and the Strategic National Stockpile should recognize revenue for vaccines when they are placed into those stockpiles.
• Stated that Staff Accounting Bulletins Topic 13 and Topic 8 are no longer applicable when a registrant adopts the new revenue standard.

The updated guidance is consistent with and does not change  the new revenue model issued by the FASB.

Related contents

• Handbook: Revenue recognition