With 700 pages of new rules released regarding FASB’s new revenue recognition standard, it’s no wonder that companies have a lot of questions about the rules. (For more on the standard, see this post .) According to this article in Compliance Week, the SEC is on the verge of releasing new guidance on the implications of the new revenue recognition standard, particularly “burning questions” regarding retroactive application, outside of the financial statements.                         .

You may recall that under the new standard, companies will need to determine whether to elect a retrospective approach, applying the standard to both current and prior years (e.g., 2016 and 2015 revenues in addition to 2017) or to take the cumulative approach, applying the standard only to 2017, which would involve some adjustments to deferred amounts as well as disclosures regarding the absence of  comparability.  The most burning of the questions before the SEC staff is whether or not the staff will provide relief on the disclosure requirements for the five-year selected financial data table for companies that elect the retrospective approach. Apparently, the SEC is evaluating “reasonable alternatives for providing disclosure” and considering whether to provide guidance in a range of areas outside of the financial statements that might be affected by the new standard, including, in addition to  selected financial data, “disclosures required under Staff Accounting Bulletin 74, which requires disclosure of the expected effects of new accounting standards, and disclosure in management discussion and analysis if a company uses the modified retrospective transition method permitted under the new accounting standard.”

The article reports that the SEC staff is continuing to work “on the disclosure initiative project, looking for ways to make required disclosures more effective. Staff members are looking at requirements under Regulation S-K and S-X, as well as Form 8-K, and whether there is overlap between GAAP requirements in the footnotes and SEC requirements. Staff members emphasized they’re hoping companies are being proactive on the issues as well, eliminating redundancies where they can and ensuring MD&A focuses on material matters.” According to the article, this process may be an iterative one, and  the staff made clear that “any thoughtful attempts to improve disclosure would not trigger a review or result in any additional comments.”