SAB 101 Scheduled To Go Into Effect.

Despite the urging of FEI and a number of others, the SEC appears to be pushing ahead with implementation of Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements." Staff members at the SEC said the bulletin will be effective for the quarter ending June 30 for calendar-year companies, and at the beginning of the fiscal year for companies that report differently. While there has been widespread pressure to delay the standard further, there had been no decision to do so by press time.

The effective date of the revenue-recognition bulletin had been pushed back in March following a letter to the SEC from FEI's Committee on Corporate Reporting. In a second letter, sent in June, the committee urged the agency to delay the implementation date to the fourth quarter. SEC staffers said FEI's comments were among a number requesting a delay.

"The revenue recognition principles covered in the SAB are both fundamental and pervasive in their applicability," noted committee chairman Philip Ameen in the letter. "The extent to which the SAB amends practices that were historically universally accepted, renders the SAB an important accounting change, not a clarification of existing GAAP. The hallmark of any successful accounting change is a thorough examination of the issues and consequences associated with the change to ensure that the new guidance will have the intended effect.

"Indeed, had the matters covered by the SAB been addressed through issuance of a new FASB standard or interpretation, a process we would have preferred, the nature and complexity of many of these issues would have required extensive due process, and the answers derived would have applied equally to SEC registrants and private companies and other non-SEC registrants. The benefit of the interchange that occurs through that process mutes to both the standard-setter and the affected companies by reducing the uncertainty and narrowing the range of practice in implementing the new guidance."