As companies worked through the implementation of the new revenue recognition standard they dealt with two issues surrounding ICFR:
What changes were required to ICFR for this new standard, and
Whether or not these changes to ICFR required reporting a material change in ICFR.
Reporting material changes in ICFR is a requirement in both Form 10-K and Form 10-Q and involves substantial amounts of judgment. This postreviews the details of this requirement.
As we grapple with the new Lease and Credit Losses standards, to help us with the ICFR change process, FEI published two research studies in November 2018:
The reports were issued by FEI’s Committee on Corporate Reporting (CCR). (Our workshop leader Reed Wilson is a member of CCR, and thanks to him for the heads-up about these reports). Both are designed to help companies anticipate ICFR issues they may encounter as they implement these new standards and also provide examples for documentation and processes.
As always, your thoughts and comments are welcome!