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SEC Introduces Initiatives for Cyber Threats and Retail Investors

Building on its Enforcement Division’s efforts to counter cyber-based threats and safeguard retail investors, the Securities and Exchange Commission (“SEC”) announced on September 25 the creation of the following two initiatives: Cyber Unit: Using the Enforcement Division’s cyber expertise, the new Cyber Unit will target misconduct concerning market manipulation schemes featuring false information distributed electronically and through social media; hacking to acquire private information; and violations related to distributed ledger technology and initial coin offerings. Retail Strategy Task Force: With the Enforcement Division experiencing long-term success at bringing cases such as the sale of unsuitable structured products and microcap pump-and-dump schemes, the Retail Strategy Task Force will create proactive,. Read More.

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SEC Chairman Clayton Testifies on 2016 Cybersecurity Breach

After announcing on September 20 that the Securities and Exchange Commission’s (“SEC”) computers were breached last year , SEC Chairman Jay Clayton recently provided additional details on the cybersecurity intrusion to the Senate Committee on Banking, Housing and Urban Affairs. During his September 26 testimony, Clayton expressed his concerns over the 2016 breach involving the SEC’s Electronic Data Gathering And Retrieval filing system. He noted that the breach will cause many to pay close attention to the SEC’s approach to cybersecurity, and whether the agency is taking the proper steps to appropriately address its cyber risk. Clayton also reiterated that the SEC’s review and investigation of the matter are. Read More.

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Accounting Standards Codification Updated for Revenue Recognition and Leases Standards

The Financial Accounting Standards Board has issued Accounting Standards Update (“ASU”) No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments. This Update adds, amends, and replaces Securities and Exchange Commission (“SEC”) paragraphs of the Accounting Standards Codification (“ASC”) concerning the adoption and transition rules of ASU No. 2014-09, Revenue from Contracts with Customers and ASU No. 2016-02, Leases, for public companies. ASU No.. Read More.

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Revenue Standard Could Have Major Impact on Software Industry

With the Financial Accounting Standards Board’s (“FASB”) new revenue recognition rules becoming effective in three months, the Accounting Standards Update (“ASU”) could have a major effect on the bottom lines of companies in the software industry. Under ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), software companies will have to recognize more revenue when the sale occurs. However, companies in the software industry have long-term arrangements with customers, meaning revenue is usually recognized over the life of the contract. One software company already feeling the impact is Microsoft, which was an early adopter of the standard. Under the. Read More.

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FASB Proposes Reorganizing Consolidation Guidance

To address concerns over the organization of the guidance under Topic 810, Consolidation, the Financial Accounting Standards Board (“FASB”) recently issued Proposed Accounting Standards Update, Consolidation (Topic 812): Reorganization. The proposal reorganizes certain components within the FASB’s consolidation guidance and includes for illustrative purposes the amendments under the Proposed Accounting Standards Update, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. The FASB would reorganize the consolidation guidance under Topic 810 into a new Topic featuring the following two Subtopics for variable interest entities and voting interest entities: Subtopic 812-20, Consolidation—Variable Interest Entities Subtopic 812-30, Consolidation—Voting. Read More.

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Interpretive Guidance Updated for Revenue Recognition

New interpretive guidance is available regarding revenue recognition. On August 18, the Securities and Exchange Commission (“SEC”) issued Release No. 33-10402, Commission Guidance Regarding Revenue Recognition for Bill-and-Hold Arrangements, which advises public companies to abandon the guidance for bill-and-hold transactions under Accounting and Auditing Enforcement Release (“AAER”) No. 108, In the Matter of Stewart Parness, once they start applying Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers. Until then, companies should continue using guidance under AAER No. 108. Another interpretive release issued was Release No. 33-10403, Updates to Commission Guidance Regarding Accounting for. Read More.

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