SEC and Staff Issue Interpretative Guidance on Revenue Recognition
On August 18, the Securities and Exchange Commission issued a press release announcing its issuance of two releases and the SEC staff’s release of a Staff Accounting Bulletin to provide updates to interpretative guidance on revenue recognition.
The SEC updated its guidance on bill-and-hold arrangements, providing that registrants should no longer refer to criteria in Accounting and Auditing Enforcement Release No. 108, In the Matter of Stewart Parness, to recognize revenue for such arrangements upon the registrant’s adoption of Accounting Standards Codification (ASC) Topic 606 (Revenue from Contracts with Customers).
The SEC updated its 2005 guidance on Commission Guidance Regarding Accounting for Sales of Vaccines and Bioterror Countermeasures to the Federal Government for Placement into the Pediatric Vaccine Stockpile or the Strategic National Stockpile, providing that manufacturers should recognize revenue for vaccines that are placed in the Vaccines for Children Program and the Strategic National, consistent with ASC Topic 606.
The SEC’s Office of the Chief Accountant and Division of Corporation Finance released Staff Accounting Bulletin No. 116 (SAB 116), which conforms SEC staff guidance on revenue recognition to the Financial Accounting Standards Board’s adoption of, and amendments to, ASC Topic 606.
The SEC and SEC staff noted that, until a registrant adopts ASC Topic 606, it should continue to rely on prior guidance.
The press release is available here.