Document ID: SEC-2017-1459-0001
Agency: sec
Document Type: Rule
Title: Staff Accounting Bulletins
Posted Date: 2017-08-29T04:00Z

[Federal Register Volume 82, Number 166 (Tuesday, August 29, 2017)]
[Rules and Regulations]
[Pages 41146-41147]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17912]

[[Page 41145]]

Vol. 82

Tuesday,

No. 166

August 29, 2017

Part III

Securities and Exchange Commission

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17 CFR Parts 211, 231, 241, et al.

Staff Accounting Bulletin No. 116; Commission Guidance Regarding 
Revenue Recognition for Bill-and-Hold Arrangements; 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; 
Rules

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

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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.

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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

0
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

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               Subject                       Release No.                  Date           Fed. Reg. vol. and page
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                                                  * * * * * * *
Publication of Staff Accounting        SAB-116                  August 29, 2017........  [INSERT Federal
 Bulletin No. 116.                                                                        Register CITATION.]
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    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.
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    \1\ ASC 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) Narrow-Scope 
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.
    \2\ See 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).
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    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.
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    \3\ Release No. 33-10402.
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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)

[[Page 41147]]

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