9.3 Rescission of SAB 121
The SEC’s decision to rescind SAB 121 by issuing SAB 122 will result
in a number of implications related to entities’ derecognition of the obligations
and assets previously required by SAB 121. Reporting entities should carefully
evaluate disclosures about the impact of SAB 122, including those that may be
required by SAB Topic 11.M (SAB 74) for entities that do not early adopt. For more
information, see Section 2.19 of Deloitte’s
Roadmap SEC Comment Letter Considerations, Including
Industry Insights.
Connecting the Dots
The rescission of SAB 121 represents a significant change for entities that
were previously within its scope. Given the relative ease of unwinding the
safeguarding asset and liability, as well as the complexity of determining
whether certain transactions were within the scope of SAB 121, we expect
that many entities will elect to effect the rescission early and remove the
safeguarding asset and liability.