Posted on:Insights, What's New
For most calendar-year reporting companies, there is only one Form 10-Q to go before FASB’s sweeping new revenue recognition accounting standard, Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers, becomes effective. The SEC staff has offered detailed guidance on the pre-adoption disclosures they believe companies should be providing in accordance with Staff Accounting Bulletin No. 74 (SAB 74), as well as factors they believe companies should be considering in determining whether and how internal control over financial reporting (ICFR) should be changed to meet the demands of the new standard and, if such changes are material, disclosed. The SEC staff has also emphasized the important roles that audit committees and outside auditors should play in the transition process. The impact of these messages has been reinforced by PCAOB Staff Audit Practice Alert No. 15, Matters Related to Auditing Revenue from Contracts with Customers, issued on October 5, 2017.