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The Daily

SEC Recognizes FASB Recommendations to be Official Guidance for Rev. Rec. Standard

By:
Chris Gaetano
Published Date:
Feb 25, 2016

SECURITIES-AND-EXCHANGE-COMMISSION-facebookWhile the recommendations of the FASB's Transition Resource Group are not authoritative, the SEC will recognize them as official guidance for implementing the new revenue recognition standard, according to Bloomberg BNA. SEC Chief Accountant James Schnurr, in a speech on Tuesday, said firms will be expected to follow whatever conclusions come out of the group's deliberations, which are still ongoing. If they do not, the company will have to explain why to the SEC. This will mean paying attention not only to whatever authoritative guidance comes from he FASB, but the the TRG meeting minutes as well.  

The new revenue recognition standard will replace the numerous industry-specific standards with a single method based around recognizing and fulfilling performance obligations in contracts.  

Schnurr expressed “fear” that many companies are not yet ready to implement the new standard, according to Bloomberg BNA, echoing the findings of a recent PwC survey on the matter. The FASB also recognized this lack of preparedness, as this past summer it voted to delay the effective date from Dec. 15, 2016, to Dec. 15, 2017.