[Federal Register Volume 65, Number 62 (Thursday, March 30, 2000)]
[Rules and Regulations]
[Page 16811]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7839]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 211

[Release No. SAB 101A]


Staff Accounting Bulletin No. 101A

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. Since the issuance of SAB 101, the 
staff received requests from a number of groups asking for additional 
time to study the guidance. Many registrants have calendar year-ends 
and may need more time to perform a detailed review of the SAB since 
its issuance on December 3, 1999. This staff accounting bulletin delays 
the implementation date of SAB 101 for registrants with fiscal years 
that begin between December 16, 1999 and March 15, 2000.

EFFECTIVE DATE: March 24, 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: 
[email protected]; [email protected]; [email protected]; or [email protected].

SUPPLEMENTARY INFORMATION: The statements in the 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.

    Dated: March 24, 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. 101A to 
the table found in Subpart B.

Staff Accounting Bulletin No. 101A

    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, no later than the first fiscal quarter of 
the fiscal year beginning after December 15, 1999, except that 
registrants with fiscal years that begin between December 16, 1999 and 
March 15, 2000 may report a change in accounting principle no later 
than their second fiscal quarter of the fiscal year beginning after 
December 15, 1999 in accordance with FASB Statement No. 3, Reporting 
Accounting Changes in Interim Financial Statements. 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. 00-7839 Filed 3-29-00; 8:45 am]
BILLING CODE 8010-01-P