SEC chief accountant on what's next for IFRS, Rev Rec and audit committees.

Position:CHAPTER NEWS/EVENTS - United States. Securities and Exchange Commission - International Financial Reporting Standards
 
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Noting his appearance at FEI's CFRI conference was his second public speaking engagement since taking office, SEC Chief Accountant Jim Schnurr did not demure when it came to the topic of revenue recognition and the pace of the FASB/IASB's Transition Resource Group.

Rev Rec--Thoughts on the TRG, and Deferral

Noting that first and foremost, "my interest is to protect U.S. investors," Schnurr spoke on the question before the FASB on whether it will defer the effective date of its rev rec standard. (Currently, the effective date for the rev rec standard, issued by FASB in May of last year, is for "annual reporting periods beginning after Dec. 15, 2016, for public companies, and a year later for private companies.)

Although he did not explicitly call for FASB to defer the standard, his comments could be seen as pulling for such a decision, based on implementation challenges he has been made aware of, as well as additional issues the SEC has identified.

"I have spoken to [FASB Chairman] Russell Golden and [Vice Chairman] Jim Kroeker about my concerns," said Schnurr, adding those concerns are focused on topics including what is "distinct" as that term is used in the standard, and questions around "perfunctory" performance obligations. That is a key question, since the new standard requires performance obligations to be identified within contracts and revenue to be recognized as those obligations are satisfied.

Schnurr also implied the number of questions on the TRG's docket may be only a fraction of the actual number of implementation questions constituents have so far. He encouraged preparers to send those questions to the TRG, which would in effect make its 'inventory' of implementation issues, as Schnurr referred to it, more reflective of reality.

Among the most significant issues with the new standard, the chief accountant said, is that companies looking ahead to 'retrospective adoption' are looking at contracts they have in place now, and are considering whether they may have to make changes to those contracts due to the pervasive impact of the new standard, which is based on the identification of performance obligations in contracts.

Making it clear he will exercise the SEC's oversight role over FASB, Schnurr added, "We will be pushing very hard to get questions answered, and allow you to do your job."

IFRS: Hopes to 'Expand the Dialogue' in the Near Future

Turning to the topic of International Financial Reporting Standards (IFRS), Schnurr...

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