SEC Takes a Hard Look at Revenue Recognition Disclosures

The Securities and Exchange Commission wants companies to justify how they applied new accounting rules for recognizing revenue.

At least 100 companies received comment letters from the regulator through the first half of 2018, with more missives landing since then.

The SEC has asked companies to explain the methods that they used to determine revenue and apply the standard, said Rob Peters, senior director for Intelligize.

“That seemed to be the biggest issue that is consistent throughout the letters. Whether it focuses on small details, it’s still really asking about that judgment and subjectivity,” Peters told Bloomberg Tax.

Companies began ...