41146 Federal Register / Vol. 82, No. 166 / Tuesday, August 29, 2017 / Rules and Regulations 

1ASC Topic 606 was subsequently amended 

through the issuances of ASU No. 2015–14— 

Deferral of the Effective Date, ASU No. 2016–08— 

Revenue from Contracts with Customers (Topic 

606) Principal versus Agent Considerations 

(Reporting Revenue Gross versus Net), ASU No. 

2016–10—Revenue from Contracts with Customers 

(Topic 606) Identifying Performance Obligations 

and Licensing, ASU No. 2016–12—Revenue from 

Contracts with Customers (Topic 606) NarrowScope Improvements and Practical Expedients, and 

ASU No. 2016–20—Technical Corrections and 

Improvements to Update No. 2014–09, Revenue 

from Contracts with Customers (Topic 606)— 

Additional Corrections. 

2See Commission Guidance Regarding Revenue 

Recognition for Bill-and-Hold Arrangements, 

Release No. 33–10402 (Aug. 18, 2017) and 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, Release No. 33–10403 (Aug. 18, 

2017). 3Release No. 33–10402. 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Part 211 

[Release No. SAB 116] 

Staff Accounting Bulletin No. 116 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Publication of Staff Accounting 

Bulletin. 

SUMMARY: This staff accounting bulletin 

modifies portions of the interpretive 

guidance included in the Staff 

Accounting Bulletin Series in order to 

make the relevant interpretive guidance 

consistent with authoritative accounting 

guidance and Securities and Exchange 

Commission rules and regulations. 

Specifically, the staff is updating the 

Series in order to bring existing 

guidance into conformity with the 

Financial Accounting Standards Board 

Accounting Standards Codification 

Topic 606, Revenue from Contracts with 

Customers. 

DATES: Effective: August 29, 2017. 

FOR FURTHER INFORMATION CONTACT: 

Ruth Uejio, Professional Accounting 

Fellow or Sylvia Alicea, Professional 

Accounting Fellow, Office of the Chief 

Accountant at (202) 551–5300 or Nili 

Shah, Deputy Chief Accountant, 

Division of Corporation Finance at (202) 

551–3400, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549. 

SUPPLEMENTARY INFORMATION: The 

statements in staff accounting bulletins 

are not rules or interpretations 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. 

List of Subjects in 17 CFR Part 211 

Accounting, Reporting and 

recordkeeping requirements, Securities. 

Dated: August 18, 2017. 

Jill M. Peterson, 

Assistant Secretary. 

Accordingly, part 211 of title 17 of the 

Code of Federal Regulations is amended 

as follows: 

PART 211—INTERPRETATIONS 

RELATING TO FINANCIAL REPORTING 

MATTERS 

■ 1. Amend the table in subpart B by 

adding an entry for Staff Accounting 

Bulletin No. 116 at the end of the table 

to read as follows: 

Subpart B—Staff Accounting Bulletins 

Subject Release No. Date Fed. Reg. vol. and page 

* * * * * * * 

Publication of Staff Accounting Bulletin No. 116 ............ SAB–116 August 29, 2017 ................. [INSERT Federal Register CITATION.] 

Note: The text of SAB 116 will not appear 

in the Code of Federal Regulations. 

Staff Accounting Bulletin No. 116 

This staff accounting bulletin (‘‘SAB’’) 

modifies portions of the interpretive 

guidance included in the Staff 

Accounting Bulletin Series in order to 

make the relevant interpretive guidance 

consistent with current authoritative 

accounting and auditing guidance and 

Securities and Exchange Commission 

(‘‘Commission’’) rules and regulations. 

Specifically, the staff is updating the 

Series in order to bring existing 

guidance into conformity with the 

Financial Accounting Standards Board 

(‘‘FASB’’) Accounting Standards 

Codification (‘‘ASC’’) Topic 606, 

Revenue from Contracts with Customers 

(‘‘ASC Topic 606’’). The FASB adopted 

ASC Topic 606 through its issuance of 

Accounting Standards Update (‘‘ASU’’) 

No. 2014–09—Revenue from Contracts 

with Customers (Topic 606).1 In 

addition, the Commission has updated 

its interpretative guidance related to bill 

and hold arrangements and vaccine 

stockpiles.2 This SAB provides 

guidance applicable upon a registrant’s 

adoption of ASC Topic 606. Prior to 

adoption of ASC Topic 606, registrants 

should continue to refer to prior 

Commission and staff guidance on 

revenue recognition topics. 

The following describes the changes 

made to the Staff Accounting Bulletin 

Series that are presented at the end of 

this release: 

1. Topic 13: Revenue Recognition 

a. Topic 13 is no longer applicable 

upon a registrant’s adoption of ASC 

Topic 606. This topic provided the 

staff’s views regarding then-existing 

general revenue recognition guidance as 

codified in ASC Topic 605. ASC Topic 

606 provides a single set of revenue 

recognition principles governing all 

contracts with customers and 

supersedes the existing revenue 

recognition framework in ASC Topic 

605, which eliminates the need for 

Topic 13. Additionally, upon adoption 

of ASC Topic 606, a registrant should no 

longer look to the guidance in Securities 

Exchange Act Release No. 23507 and 

Accounting and Auditing Enforcement 

Release No. 108, In the Matter of Stewart 

Parness (‘‘AAER 108’’), for criteria to be 

met in order to recognize revenue when 

delivery has not occurred (commonly 

referred to as ‘‘bill-and-hold’’) as ASC 

Topic 606 provides specific guidance 

for bill-and-hold arrangements.3 Prior to 

adoption of ASC Topic 606, registrants 

should continue to refer to prior 

Commission and staff guidance on 

revenue recognition topics. 

2. Topic 8: Retail Companies 

a. Topic 8 is no longer applicable 

upon a registrant’s adoption of ASC 

Topic 606. This topic provided the 

staff’s views regarding (i) the 

prohibition of presenting sales of a 

leased or licensed department within a 

retailer’s statement of comprehensive 

income consistent with the principles 

codified within ASC Subtopic 605–45 

and (ii) the disclosure of finance charges 

imposed by retailers on credit sales. 

ASC Topic 606 provides guidance 

regarding the identification of 

performance obligations in a contract 

with a customer, presentation of 

revenue as a principal (on a gross basis) 


sradovich on DSK3GMQ082PROD with RULES3
Federal Register / Vol. 82, No. 166 / Tuesday, August 29, 2017 / Rules and Regulations 41147 

1See In the Matter of Stewart Parness, AAER 108 

(Aug. 5, 1986). 

2Rule 4–01(a)(1) of Regulation S–X, 17 CFR 

210.4–01(a)(1). See Accounting Series Release 

(‘‘ASR’’) No. 150 (Dec. 20, 1973) and ASR No. 4 

(Apr. 25, 1938). 

3Policy Statement: Reaffirming the Status of the 

FASB as a Designated Private-Sector Standard 

Setter, Release Nos. 33–8221; 34–47743; IC–26028; 

FR–70 (Apr. 25, 2003) (‘‘FR–70’’); 68 FR 23333 (May 

1, 2003). 

4 15 U.S.C. 77s(b). 

or as an agent (on a net basis) as well 

as presentation of the effects of 

financing in the statement of 

comprehensive income, which 

eliminates the need for the guidance in 

Topic 8. Prior to adoption of ASC Topic 

606, registrants should continue to refer 

to prior Commission and staff guidance 

on revenue recognition topics. 

3. Topic 11: Miscellaneous Disclosure 

a. Topic 11.A is modified to clarify 

that revenues from operating-differential 

subsidies presented under a revenue 

caption should be presented separately 

from revenue from contracts with 

customers accounted for under ASC 

Topic 606. Previously, Topic 11.A 

provided the staff’s view that revenues 

from operating-differential subsidies be 

presented as a separate line item in the 

income statement either under a 

revenue caption or as credit in the costs 

and expenses section. 

Accordingly, the staff hereby amends 

the Staff Accounting Bulletin Series as 

follows: 

* * * * * 

Topic 13: Revenue Recognition 

* * * * * 

C. Impact of a Registrant’s Adoption of 

FASB ASC Topic 606, Revenue From 

Contracts With Customers 

Topic 13 is no longer applicable upon 

a registrant’s adoption of ASC Topic 

606. Topic 13 provides the staff’s views 

regarding the general revenue 

recognition guidance codified in ASC 

Topic 605. ASC Topic 606 provides a 

single set of revenue recognition 

principles governing all contracts with 

customers and supersedes the revenue 

recognition framework in ASC Topic 

605, which eliminates the need for 

Topic 13. Prior to adoption of ASC 

Topic 606, registrants should continue 

to refer to prior Commission and staff 

guidance on revenue recognition topics. 

* * * * * 

Topic 8: Retail Companies 

* * * * * 

C. Impact of a Registrant’s Adoption of 

FASB ASC Topic 606, Revenue From 

Contracts With Customers 

Topic 8 is no longer applicable upon 

a registrant’s adoption of ASC Topic 

606. Topic 8 provides the staff’s views 

regarding (i) the prohibition of 

presenting sales of a leased or licensed 

department within a retailer’s statement 

of comprehensive income consistent 

with the principles codified within ASC 

Subtopic 605–45 and (ii) the disclosure 

of finance charges imposed by retailers 

on credit sales. ASC Topic 606 provides 

guidance regarding the identification of 

performance obligations in a contract 

with a customer, presentation of 

revenue as a principal (on a gross basis) 

or as an agent (on a net basis) as well 

as presentation of the effects of 

financing in the statement of 

comprehensive income, which 

eliminates the need for the guidance in 

Topic 8. Prior to adoption of ASC Topic 

606, registrants should continue to refer 

to prior Commission and staff guidance 

on revenue recognition topics. 

* * * * * 

Topic 11.A. Operating-Differential 

Subsidies 

Facts: Company A has received an 

operating-differential subsidy pursuant 

to the Merchant Marine Act of 1936, as 

amended. 

Question: How should such subsidies 

be displayed in the statement of 

comprehensive income? 

Interpretive Response: Revenue 

representing an operating-differential 

subsidy under the Merchant Marine Act 

of 1936, as amended, must be set forth 

as a separate line item in the statement 

of comprehensive income either under a 

revenue caption presented separately 

from revenue from contracts with 

customers accounted for under ASC 

Topic 606 or as a credit in the costs and 

expenses section. 

* * * * * 

[FR Doc. 2017–17912 Filed 8–28–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Parts 231, 241, and 271 

[Release Nos. 33–10402; 34–81428; IC– 

32784] 

Commission Guidance Regarding 

Revenue Recognition for Bill-and-Hold 

Arrangements 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Interpretation. 

SUMMARY: The Commission is 

publishing this interpretive release in 

order to bring existing guidance into 

conformity with Financial Accounting 

Standards Board Accounting Standards 

Codification Topic 606, Revenue from 

Contracts with Customers. Upon 

adoption of Accounting Standards 

Codification Topic 606, registrants 

should no longer rely on the guidance 

in Securities Exchange Act Release No. 

23507 and Accounting and Auditing 

Enforcement Release No. 108, In the 

Matter of Stewart Parness, which set 

forth the criteria to be met in order to 

recognize revenue when delivery has 

not occurred. 

DATES: Effective: August 29, 2017. 

FOR FURTHER INFORMATION CONTACT: 

Kevin L. Vaughn, Senior Associate Chief 

Accountant, or Joseph R. Epstein, 

Professional Accounting Fellow, Office 

of the Chief Accountant, at (202) 551– 

5300, U.S. Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–6561. Inquiries 

about this interpretive release also can 

be directed to oca@sec.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In 1986, in Securities Exchange Act 

Release No. 23507 and Accounting and 

Auditing Enforcement Release No. 108, 

In the Matter of Stewart Parness 

(‘‘AAER 108’’), the Commission set forth 

criteria to be met in order to recognize 

revenue when delivery has not occurred 

(commonly referred to as ‘‘bill-andhold’’).1 The Commission staff reiterated 

this guidance in Staff Accounting 

Bulletin (‘‘SAB’’) Topic 13, Revenue 

Recognition. SAB Topic 13 expressed 

the staff’s views on the basic principles 

of revenue recognition in then-existing 

generally accepted accounting 

principles and summarized in one 

location the existing guidance on 

revenue recognition to make that 

guidance more accessible to registrants 

and their auditors. 

II. The Application of Generally 

Accepted Accounting Principles for 

Revenue Recognition Related to Billand-Hold Arrangements 

The Commission historically has 

recognized pronouncements of the 

Financial Accounting Standards Board 

(‘‘FASB’’) as authoritative in the absence 

of any contrary determination by the 

Commission.2 In Financial Reporting 

Release No. 70,3 the Commission stated 

its determination that the FASB and its 

parent organization, the Financial 

Accounting Foundation, satisfied the 

criteria in Section 19(b) of the Securities 

Act of 1933 4 and, accordingly, FASB’s 

financial accounting and reporting 

standards are recognized as ‘‘generally 

accepted’’ for purposes of the federal 


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