Defining Issues | December 2018

SEC provides clarification for EGCs adopting new accounting standards

KPMG reports on SEC staff remarks about adoption dates of new accounting standards for emerging growth companies and new registrants. These remarks cover reporting expectations when an EGC electing private company adoption dates loses its status.


  • Public companies that qualify as emerging growth companies (EGCs) and new registrants

Relevant dates

  • Effective immediately.

Key impacts

  • When an EGC that elected deferred adoption of new accounting standards loses its EGC status, it is normally required to comply with public company effective dates for the adoption of new or revised accounting standards
  • SEC staff stated that if an EGC adopts a new accounting standard before it loses EGC status on the last day of its fiscal year, the SEC will not expect the EGC to revise its adoption date
  • Using ASC 606 as an example, when calendar year-end EGCs that elected deferred adoption lose status on the last day of their fiscal year 2019 or later, the SEC will not object if those companies do not revise their January 1, 2019 adoption date. There are however other reporting considerations
  • A new registrant filing its initial registration statement that does not qualify as an EGC should adopt accounting standards as of the effective date for public companies
  • The SEC staff’s remarks do not change. Regulation S-X. Companies are encouraged to consult with the SEC staff on specific questions

Report contents


EGC status loss vs. standard adoption

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