[Federal Register Volume 65, Number 128 (Monday, July 3, 2000)]
[Rules and Regulations]
[Pages 40992-40993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-16580]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 211

[Release No. SAB 101B]


Staff Accounting Bulletin No. 101B

AGENCY: Securities and Exchange Commission.

ACTION: Publication of Staff Accounting Bulletin.

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SUMMARY: Staff Accounting Bulletin No. 101 (``SAB 101'') was released 
on December 3, 1999 (64 FR 68936 December 9, 1999) and provides the 
staff's views in applying generally accepted accounting principles to 
selected revenue recognition issues. SAB 101A was released on March 24, 
2000 (65 FR 16811 March 30, 2000) and delayed for one fiscal quarter 
the implementation date of SAB 101 for registrants with fiscal years 
beginning between December 16, 1999 and March 15, 2000. Since the 
issuance of SAB 101 and SAB 101A, the staff has continued to receive 
requests from a number of groups asking for additional time to 
determine the effect, if any, on registrant's revenue recognition 
practices. This staff accounting bulletin delays the implementation 
date of SAB 101 until no later than the fourth fiscal quarter of fiscal 
years beginning after December 15, 1999.

EFFECTIVE DATE: June 26, 2000.

FOR FURTHER INFORMATION CONTACT: Richard Rodgers, Scott Taub, or Eric 
Jacobsen, Professional Accounting Fellows, Office of the Chief 
Accountant (202/942-4400) or Robert Bayless, Division of Corporation 
Finance (202/942-2960), Securities and Exchange Commission, 450 Fifth 
Street, NW, Washington, DC 20549; electronic addresses: 
<a href="/cdn-cgi/l/email-protection#32605d565557404160724157511c555d44"><span class="__cf_email__" data-cfemail="6d3f02090a081f1e3f2d1e080e430a021b">[email protected]</span></a>; <a href="/cdn-cgi/l/email-protection#faae9b8f98a9ba899f99d49d958c"><span class="__cf_email__" data-cfemail="a5f1c4d0c7f6e5d6c0c68bc2cad3">[email protected]</span></a>; <a href="/cdn-cgi/l/email-protection#6a200b090508190f042f2a190f09440d051c"><span class="__cf_email__" data-cfemail="125873717d7061777c57526177713c757d64">[email protected]</span></a>; or 
<a href="/cdn-cgi/l/email-protection#3577544c5950464667754650561b525a43"><span class="__cf_email__" data-cfemail="5210332b3e37212100122137317c353d24">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: The statements in the staff accounting 
bulletins are not rules or interpretations

[[Page 40993]]

of the Commission, nor are they published as bearing the Commission's 
official approval. They represent interpretations and practices 
followed by the Division of Corporation Finance and the Office of the 
Chief Accountant in administering the disclosure requirements of the 
Federal securities laws.

    Dated: June 26, 2000.
Margaret H. McFarland,
Deputy Secretary.

PART 211--[AMENDED]

    Accordingly, Part 211 of Title 17 of the Code of Federal 
Regulations is amended by adding Staff Accounting Bulletin No. 101B to 
the table found in Subpart B.

Staff Accounting Bulletin No. 101B

[The text of Staf Accounting Bulletin No. 101B will not appear in the 
Code of Federal Regulations.]

    The staff hereby amends Question 2 of Section B of Topic 13 of the 
Staff Accounting Bulletin Series.

Topic 13: Revenue Recognition

* * * * *

B. Disclosures

Question 1

* * * * *

Question 2

    Question: Will the staff expect retroactive changes by 
registrants to comply with the accounting described in this 
bulletin?
    Interpretive Response: All registrants are expected to apply the 
accounting and disclosures described in this bulletin. The staff, 
however, will not object if registrants that have not applied this 
accounting do not restate prior financial statements provided they 
report a change in accounting principle in accordance with APB 
Opinion No. 20, Accounting Changes, and FASB Statement No. 3, 
Reporting Accounting Changes in Interim Financial Statements, no 
later than the fourth fiscal quarter of the fiscal year beginning 
after December 15, 1999. In periods subsequent to transition, 
registrants should disclose the amount of revenue (if material to 
income before income taxes) recognized in those periods that was 
included in the cumulative effect adjustment. If a registrant files 
financial statements with the Commission before applying the 
guidance in this bulletin, disclosures similar to those described in 
Staff Accounting Bulletin Topic 11-M, Disclosure of the Impact that 
Recently Issued Accounting Standards Will Have on the Financial 
Statements of a Registrant When Adopted in a Future Period, should 
be provided. With regard to question 10 of Topic 13-A and Topic 8-A 
regarding income statement presentation, the staff would normally 
expect retroactive application to all periods presented unless the 
effect of applying the guidance herein is immaterial.
    However, if registrants have not previously complied with 
generally accepted accounting principles, for example, by recording 
revenue for products prior to delivery that did not comply with the 
applicable bill-and-hold guidance, those registrants should apply 
the guidance in APB Opinion No. 20 for the correction of an 
error.\1\ In addition, registrants should be aware that the 
Commission may take enforcement action where a registrant in prior 
financial statements has violated the antifraud or disclosure 
provisions of the securities laws with respect to revenue 
recognition.

    \1\ APB Opinion No. 20, para. 13 and para. 36-37 describe and 
provide the accounting and disclosure requirements applicable to the 
correction of an error in previously issued financial statements. 
Because the term ``error'' as used in APB Opinion No. 20 includes 
``oversight or misuse of facts that existed at the time that the 
financial statements were prepared,'' that term includes both 
unintentional errors as well as intentional fraudulent financial 
reporting and misappropriation of assets as described in Statement 
on Auditing Standards No. 82, Consideration of Fraud in a Financial 
Statement Audit.
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[FR Doc. 00-16580 Filed 6-30-00; 8:45 am]
BILLING CODE 8010-01-P


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