The SEC indicated in a speech in December that they expect more substantial disclosures in 10-Ks on the impact of ASC 606 and companies’ progress.
“…Consistent with SAB Topic 11.M, if a registrant does not know or cannot reasonably estimate the impact that adoption is expected to have, then in addition to making a statement to that effect, the registrant should consider making additional qualitative disclosures to assist the reader in assessing the significance of the impact that the ASUs will have when adopted.
In this regard, the SEC staff expects the additional disclosures to include a description of the effect of the accounting policies the registrant expects to apply, if determined, and a comparison to the registrant’s current accounting policies. An example of this type of disclosure might include a statement that the registrant expects the timing of revenue recognition to be accelerated because it anticipates that license revenue will be recognized at a point in time, rather than over time, which is its current practice. A registrant should also describe the status of its process to implement the new standards and the significant implementation matters yet to be addressed. For example, a registrant might provide a statement that it has completed an initial assessment, but has yet to determine its accounting policy for capitalization of costs to obtain a contract.”
The SEC’s full speech can be accessed here: https://www.sec.gov/news/speech/alicea-2016-aicpa.html
At CFGI, we are working closely with our clients to identify, assess and document the impact of the new guidance as well as any related systems, processes and controls changes that may be required. Let our experience assisting clients across a variety of industries help your company in its adoption of the new guidance. Please contact us for more information.