SEC Sets Disclosure Expectations as New Revenue Recognition Standard Implementation Nears
Speaking at a conference, Wesley R. Bricker, SEC Deputy Chief Accountant gave his views on appropriate disclosure as public companies approach implementation of the new revenue recognition standard. According to Mr. Bricker:
“Speaking of disclosures, the SEC staff has long advised that a registrant should provide transition disclosures to investors of the impact that a recently issued accounting standard will have on its financial statements when that standard is adopted in a future period.
The preparation of the transition disclosures should be subject to effective ICFR and disclosure controls and procedures. As management completes portions of its implementation plan and develops an assessment of the anticipated impact the standard will have on the company’s financial statements, internal and disclosure controls should be designed and implemented to timely identify relevant disclosure content from the implementation assessments and to ensure, where necessary, that appropriately informative disclosure is made.
Investors should expect the level of transition disclosures to increase as a company progresses in its implementation plans and, when necessary, engage with company management to understand these disclosures.”
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