TheCorporateCounsel.net

Last week, Broc blogged that companies are lagging in preparing for the upcoming changes to the “revenue recognition” accounting standard that takes effect the start of next year. And it’s notable that companies may also be lagging in 10-Q transition disclosure. Over on our “Proxy Season Blog,” Broc recently identified this as “The Key MD&A Item in 2017 10-Qs” & highlighted a sample disclosure.

This blog excerpt from Dorsey’s Gary Tygesson provides more pointers:

Of more immediate concern, companies should be reviewing their Form 10-Q disclosures this quarter and for the balance of the year to make sure that they have addressed the SEC staff’s transitional disclosure requirements set forth in Staff Accounting Bulletin No. 74 regarding the expected impact of the new revenue recognition rules. If a company does not know, or cannot reasonably estimate, the expected financial statement impact of the new rules, that fact should be disclosed.

In that case, however, as noted in a recent speech by the SEC’s Chief Accountant, Wes Bricker, the SEC staff expects a qualitative description of the effect of the new accounting standard, and a comparison to the company’s current accounting, to aid investors in understanding the anticipated impact. Mr. Bricker said that companies “should also disclose the status of its implementation process and significant implementation matters yet to be addressed.” Based on a preliminary look at disclosures in SEC filings to date, Mr. Bricker reported that a number of companies have enhanced their transition disclosures, while for others “there is still more work to do.”

Mr. Bricker also advised caution for companies that conclude in their transitional disclosures that the impact of the new revenue recognition standard is not expected to be material. Because the new standard includes comprehensive new disclosures about contracts with customers and related judgments made by companies, he warned that “the basis of any statement that the impact of the new standard is immaterial should reflect consideration of the full scope of the new standard, which covers recognition, measurement, presentation and disclosure for revenue transactions.”

A New “Intrastate Integration” CDI: Rule 147

Yesterday, Corp Fin issued this new CDI 141.06 regarding how offerings under Rule 147 can transition to those relying on Rule 147A…

PCAOB’s “AuditorSearch” Database: Auditors & Engagement Partners Now Searchable

Recently, the PCAOB launched “AuditorSearch” – a public database of engagement partners & auditors. This search tool allows you to surf through the data filed as part of the new Form AP. The database can provide insight into the relative experience of various engagement partners – such as whether they’ve been associated with restatements or disciplinary proceedings. It also shows whether other auditors performed work underlying the audit report.

Poll: Another Editor??

It’s official – my first week of blogging is here. Readers everywhere are checking their bookmarks & emailing Broc. I can confirm he’s well (albeit in Japan on vaca) – and that all of our content remains subject to our quality-control procedures.

I’m joining TheCorporateCounsel.net after 10 years in private practice. Everyone – including me – thought I’d spend my life in the law firm trenches. Who doesn’t love the adrenaline rush of an FD slip or an unexpected shareholder proposal? But when opportunity knocks…

When we know each other better, I’ll share some reactions to my job change by former colleagues. Let’s just say they were all across the board. In the meantime, Broc & I thought it would be fun to get your reactions too – in this anonymous poll:

– Liz Dunshee