Accounting Journal Entry
February 1, 2016 — Last week, Wesley R. Bricker, deputy chief accountant in the SEC’s Office of the Chief Accountant (OCA) spoke at the 43rd Annual Securities Regulation Institute (sponsored by the Northwestern Pritzker School of Law) about the implementation of the new revenue standard.1 His remarks followed a recent announcement that the IASB has completed its decision-making process related to clarifying the new revenue standard and that the IASB does not plan to schedule any more TRG2 meetings for IFRS constituents. The following are some key points from Mr. Bricker’s remarks on the new revenue standard and the TRG:
- The SEC staff views the new, largely converged revenue standard as an improvement in financial reporting for both domestic and foreign filers.
- The TRG’s objective — to solicit, analyze, and publicly discuss stakeholder implementation issues — remains relevant.
- The SEC staff continues to support the TRG as a mechanism to promote more consistent application of the new revenue standard.
- While the IASB will no longer attend TRG meetings, the FASB will continue to address implementation issues and has scheduled three TRG meetings for 2016. Further, TRG meeting participants should be prepared to view matters from a global perspective.
- The SEC staff attends TRG meetings and will use the discussions as a basis to assess the appropriateness of domestic and foreign registrants’ revenue recognition policies. Registrants should therefore monitor and consider TRG discussions and meeting minutes (which are available on the standard setters’ Web sites) in the development of reasonable revenue recognition accounting policies.
- The SEC staff strongly encourages domestic and foreign filers to consult with the OCA if they anticipate selecting an accounting policy that is inconsistent with TRG discussions (i.e., in which general agreement was reached and documented in meeting minutes).