According to Deloitte's "The New Revenue Standard — A Look at SEC Feedback in Year 1," disclosures pertaining to: (i) significant judgments - including identification of performance obligations, determination & allocation of the transaction price, and identification of a measure of progress; (ii) performance obligations - including timing of revenue recognition, significant payment terms, significant financing components, and the nature of goods or services (including principal vs. agent considerations); and (iii) capitalized contract costs, e.g., method of amortization and its correlation with the benefit period, accounted for 40%, 20% and 10%, respectively, of the themes noted in its review of approximately 400 SEC comment letters on the application of the new revenue recognition standard.
Further, comments were highly concentrated in particular industries, with the Consumer & Industrial Products industry receiving approximately 45% of the comments; the Technology, Media, and Telecommunications industry receiving approximately 35%; and the Life Sciences & Health Care industry and Financial Services industry each receiving approximately 10%.
The new publication includes instructive firm insights on - and sample comments illustrating - each of the top comment letter-targeted disclosure areas, as well as Deloitte's intel on industry-concentrated comment areas.
Access an abundance of Revenue Recognition resources on our Financial Reporting page. This post first appeared in the weekly Society Alert!