The first release updates the SEC’s guidance for bill-and-hold arrangements by stating that registrants should no longer refer to the criteria in Accounting and Auditing Enforcement Release No. 108, In the Matter of Stewart Parness (AAER 108), to recognize revenue for such arrangements after adopting Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers. Until a registrant adopts ASC Topic 606, it should continue referring to the guidance included in AAER 108.

The second release updates the 2005 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. The release states that consistent with ASC Topic 606, manufacturers should recognize revenue for vaccines that are placed into the Vaccines for Children Program and the Strategic National Stockpile.  Until a registrant adopts ASC Topic 606, it should continue referring to the guidance included in the 2005 Release.

Finally, the SEC’s Office of the Chief Accountant and Division of Corporation Finance released Staff Accounting Bulletin (SAB) No. 116. This SAB brings existing SEC staff guidance into conformity with the Financial Accounting Standard Board’s adoption of and amendments to ASC Topic 606. 

The SAB modifies the following:

–  SAB Topic 13, Revenue Recognition

–  SAB Topic 8, Retail Companies, and

–  Section A, Operating-Differential Subsidies of SAB Topic 11, Miscellaneous Disclosure.

The guidance in SAB 116 applies upon a registrant’s adoption of ASC Topic 606. Until adopting ASC Topic 606, registrants should continue referring to prior staff guidance on revenue recognition.

Sources

Commission and Commission Staff Issue Updates to Interpretive Guidance on Revenue Recognition (www.sec.gov)

Commission Guidance Regarding Revenue Recognition for Bill-and-Hold Arrangements (www.sec.gov)

Updates to 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 (www.sec.gov)

Staff Accounting Bulletin No. 116 (www.sec.gov)