At the September 22, 2016 EITF meeting the SEC Staff made an important announcement about SAB Topic 11-M/SAB 74 disclosures about recently issued accounting standards.

We have done a number of posts about this disclosure, and you can review the basics here.

Because companies will be implementing three major new standards over the next few years the Staff:

Emphasized the importance of these disclosures because investors need to be aware of how much the new revenue recognition, leases and financial instrument impairment standards may or may not affect future results, and

Discussed what companies should do if they cannot yet quantify the impact of these changes.

In the Staff Announcement SEC Assistant Deputy Chief Accountant Jenifer Minke-Girard stated that if a company cannot yet estimate the impact of adopting these new standards then it should consider making incremental qualitative disclosures about the potential significance of adopting the new standards that would include:

The status of the company’s implementation process,

A description of any significant implementation matters that have not yet been addressed,

The effect of any accounting policies that the registrant expects to select upon adoption, and

How such policies may differ from current accounting policies.

While not saying that a specific time table was appropriate, Ms. Minke-Girard said it would be appropriate to include these disclosures in interim filings before the end of the calendar year and the timing of this announcement at the September EITF meeting was to provide time to make these disclosures in year-end filings.

As always, your thoughts and comments are appreciated!