What is the new FASB revenue recognition rule?
To meet that objective, the new guidance establishes the following core principle: Recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Does SEC have influence over FASB?
In addition, the SEC has the ultimate responsibility to ensure that the FASB deals with issues referred to it by the SEC. The cooperative effort between the public and private sectors has given the United States the best financial reporting system in the world, and the Commission is intent on making it even better.
What is the relationship between SEC and FASB?
The Securities and Exchange Commission (SEC) recognizes the FASB as the accounting standard setter for public companies. It is also recognized by state accounting boards, the American Institute of Certified Public Accountants (AICPA), and other organizations in the field.
Does the SEC enforce GAAP?
Responsibility for enforcement and shaping of generally accepted accounting principles (GAAP) falls to two organizations: The Financial Accounting Standards Board (FASB) and Securities and Exchange Commission (SEC). The SEC has the authority to both set and enforce accounting standards.
What is FASB ASC Topic 606?
The core principle of Topic 606 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Does the SEC have more authority than the FASB?
The primary governmental body that has influence over the FASB is the SEC. The FASB has a government mandate and therefore does not have to follow due process in issuing a standard.
Is the SEC responsible for financial accounting standards?
The quality of our accounting standards and our capital markets can be attributed in large part to the private sector standards-setting process, as overseen by the SEC. The primary private sector standards-setter is the Financial Accounting Standards Board (the “FASB”), which was established in 1972.
How does the SEC regulate accounting?
Instead of issuing standards itself, the SEC is primarily concerned with enforcing accounting and auditing standards in the context of financial statements it receives from public companies under the federal securities laws. It also oversees the Public Company Accounting Oversight Board.
How are FASB and GAAP related?
The FASB Accounting Standards Codification® is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied to nongovernmental entities. The Codification is effective for interim and annual periods ending after September 15, 2009.