Federal Register / Vol. 82, No. 166 / Tuesday, August 29, 2017 / Rules and Regulations 41149 

1See 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– 

8642 (Dec. 5, 2005). 

2The International Accounting Standards Board 

(IASB) has also issued IFRS 15, Revenue from 

Contracts with Customers (IFRS 15). The issuance 

of ASC Topic 606 and IFRS 15 completes the joint 

effort by the FASB and IASB that was undertaken 

with the intent of improving financial reporting by 

creating converged comprehensive revenue 

recognition guidance for U.S. GAAP and IFRS. 

3Rule 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). 

4Policy 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). 

5 15 U.S.C. 77s(b). 

6See FR–70; Rule 4–01(a)(1) of Regulation S–X, 

17 CFR 210.4–01(a)(1). 

7Commission Guidance Regarding Revenue 

Recognition for Bill-and-Hold Arrangements, 

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

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

* * * * * * * 

Commission Guidance Regarding Revenue Recognition 

for Bill-and-Hold Arrangements.

IC–32784 Aug. 18, 2017 ..................... [INSERT Federal Register CITATION]. 

By the Commission. 

Dated: August 18, 2017. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2017–17913 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. 33–10403; 34–81429; IC– 

32785] 

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 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Interpretation. 

SUMMARY: The Securities and Exchange 

Commission is publishing this 

interpretive release to update previously 

issued guidance with respect to 

accounting for sales of vaccines and 

bioterror countermeasures to the Federal 

Government for placement into 

stockpiles related to the Vaccines for 

Children Program or the Strategic 

National Stockpile. This update is being 

provided to bring existing guidance into 

conformity with Financial Accounting 

Standards Board’s Accounting 

Standards Codification Topic 606, 

Revenue from Contracts with 

Customers. This guidance is applicable 

upon a registrant’s adoption of 

Accounting Standards Codification 

Topic 606 and is applicable to all 

arrangements for which revenue is 

recognized in accordance with 

Accounting Standards Codification 

Topic 606. 

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. Introduction 

The Securities and Exchange 

Commission (‘‘Commission’’) continues 

to be committed, as stated in previouslyissued guidance (the ‘‘2005 Release’’),1

to addressing any unintended 

consequences of accounting 

requirements that could impair the 

nation’s ability to create and maintain 

sufficient supplies of various vaccines 

and bioterror countermeasures 

(‘‘enumerated vaccines’’). The 

Commission issued the 2005 Release to 

address questions about the timing of 

revenue recognition for vaccines placed 

into the Vaccines for Children Program 

and the Strategic National Stockpile. At 

the time of the 2005 Release, some 

expressed concerns that the application 

of generally accepted accounting 

principles may require revenue 

recognition to be delayed beyond the 

period in which the vaccine is placed in 

the stockpile, and may have an 

unintended consequence of causing 

some vaccine manufacturers to decline 

to participate in these critical stockpile 

programs. The Commission published 

the guidance in the 2005 Release to 

resolve the accounting questions. With 

the Financial Accounting Standards 

Board’s (‘‘FASB’’) issuance of 

Accounting Standards Codification 

(‘‘ASC’’) Topic 606, Revenues from 

Contracts with Customers (‘‘ASC Topic 

606’’),2 we are providing this updated 

guidance. 

Government vaccine stockpile 

programs are unique in many respects. 

For example, the primary objective of 

purchasing the vaccines is not to take 

delivery for ultimate use but rather to be 

able to require immediate delivery on 

notice. An additional characteristic of 

vaccine stockpiles is the limited shelf 

life of the vaccines. For these and other 

reasons, the Commission continues to 

limit this guidance to the vaccines 

enumerated below. 

II. The Application of Generally 

Accepted Accounting Principles for 

Revenue Recognition to Vaccine 

Stockpiles 

The Commission historically has 

recognized pronouncements of the 

FASB as authoritative in the absence of 

any contrary determination by the 

Commission.3 In Financial Reporting 

Release No. 70,4 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 5 and, accordingly, FASB’s 

financial accounting and reporting 

standards are recognized as ‘‘generally 

accepted’’ for purposes of the federal 

securities laws. As a result, registrants 

are required to comply with those 

standards in preparing financial 

statements filed with the Commission, 

unless the Commission provides 

otherwise.6

Although no specific guidance has 

been published by the FASB related to 

revenue recognition for vaccine 

stockpiles, the FASB has issued 

comprehensive revenue recognition 

guidance in ASC Topic 606, which 

supersedes most previous revenue 

recognition guidance issued by the 

FASB. 

In response to the new, 

comprehensive revenue recognition 

model in ASC Topic 606, simultaneous 

with publication of this release, the 

Commission has issued an 

interpretation stating 7 that upon the 

registrant’s adoption of ASC Topic 606, 

such registrant should no longer rely on 

the guidance in Securities Exchange Act 

Release No. 23507 and Accounting and 


sradovich on DSK3GMQ082PROD with RULES3
41150 Federal Register / Vol. 82, No. 166 / Tuesday, August 29, 2017 / Rules and Regulations 

8See In the Matter of Stewart Parness, AAER 108 

(Aug. 5, 1986). 

9See ASC paragraph 606–10–05–04. 

10See ASC paragraphs 606–10–25–23 through 

25–30. 

11See ASC paragraphs 606–10–55–81 through 

55–84. 

12See ASC paragraph 606–10–55–82. 

13See ASC paragraph 606–10–55–83. 

Auditing Enforcement Release No. 108, 

In the Matter of Stewart Parness 

(‘‘AAER 108’’),8 which set forth criteria 

to be met in order to recognize revenue 

when delivery has not occurred. The 

Commission staff had previously 

reiterated the guidance in AAER 108 in 

Staff Accounting Bulletin (‘‘SAB’’) 

Topic 13, Revenue Recognition, which 

the staff is modifying as a result of the 

FASB’s issuance of ASC Topic 606. 

Under ASC Topic 606, the general 

criteria for revenue recognition includes 

identifying the contract(s) with a 

customer, identifying the performance 

obligations in the contract, determining 

the transaction price, allocating the 

transaction price to the performance 

obligations in the contract, and 

recognizing revenue when (or as) the 

entity satisfies a performance obligation 

by transferring a promised good or 

service to a customer.9 A good or service 

is transferred when (or as) the customer 

obtains control of that good or service 

and ASC Topic 606 sets forth indicators 

of when control has been transferred.10

ASC Topic 606 also provides specific 

guidance on contracts under which an 

entity bills a customer for a product but 

the entity retains physical possession of 

the product until it is transferred to the 

customer at a point in time in the future 

(i.e., a bill-and-hold arrangement).11

Topic 606 acknowledges that, for some 

contracts, a customer may obtain control 

of a product even though that product 

remains in an entity’s physical 

possession.12 In order to recognize 

revenue in a bill-and-hold arrangement, 

Topic 606 requires consideration of the 

indicators of when control has been 

transferred and sets forth additional 

criteria to be met.13

III. Updated Commission Guidance 

The Commission believes vaccine 

manufacturers should recognize revenue 

and provide the disclosures required 

under ASC Topic 606 when vaccines are 

placed into Federal Governmental 

stockpile programs because control of 

the enumerated vaccines will have been 

transferred to the customer and the 

criteria to recognize revenue in a billand-hold arrangement under ASC Topic 

606 will have been met. 

The following are the enumerated 

vaccines subject to this release: 

• Childhood disease vaccines; 

• Influenza vaccines; and 

• Other vaccines and 

countermeasures sold to the Federal 

Government for placement in the 

Strategic National Stockpile. 

Due to the uniqueness of the vaccine 

stockpile programs as discussed above, 

this interpretative guidance is not 

applicable to transactions other than the 

sales of enumerated vaccines by vaccine 

manufacturers. 

Prior to a registrant’s adoption of ASC 

Topic 606, the guidance contained in 

the 2005 Release is still applicable to all 

arrangements for which revenue is 

recognized. 

List of Subjects in 17 CFR Parts 231, 

241, and 271 

Accounting, Diseases, Securities, 

Terrorism. 

Amendments to the Code of Federal 

Regulations 

For the reasons set out in the 

preamble, the Commission is amending 

title 17, chapter II of the Code of Federal 

Regulations as set forth below: 

PART 231—INTERPRETATIVE 

RELEASES RELATING TO THE 

SECURITIES ACT OF 1933 AND 

GENERAL RULES AND REGULATIONS 

THEREUNDER 

■ 1. Part 231 is amended by adding an 

entry for Release No. 33–10403 at the 

end of the table to read as follows: 

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

* * * * * * * 

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.

33–10403 Aug. 18, 2017 ..................... [INSERT Federal Register CITATION]. 

PART 241—INTERPRETATIVE 

RELEASES RELATING TO THE 

SECURITIES EXCHANGE ACT OF 1934 

AND GENERAL RULES AND 

REGULATIONS THEREUNDER 

■ 2. Part 241 is amended by adding an 

entry for Release No. 34–81429 at the 

end of the table to read as follows: 

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

* * * * * * * 

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.

34–81429 Aug. 18, 2017 ..................... [INSERT Federal Register CITATION]. 


sradovich on DSK3GMQ082PROD with RULES3
Federal Register / Vol. 82, No. 166 / Tuesday, August 29, 2017 / Rules and Regulations 41151 

PART 271—INTERPRETATIVE 

RELEASES RELATING TO THE 

INVESTMENT COMPANY ACT OF 1940 

AND GENERAL RULES AND 

REGULATIONS THEREUNDER 

■ 3. Part 271 is amended by adding an 

entry for Release No. IC–32785 at the 

end of the table to read as follows: 

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

* * * * * * * 

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.

IC–32785 Aug. 18, 2017 ..................... [INSERT Federal Register CITATION]. 

By the Commission. Dated: August 18, 2017. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2017–17914 Filed 8–28–17; 8:45 am] 

BILLING CODE 8011–01–P 


sradovich on DSK3GMQ082PROD with RULES3