Staff comments from the Securities and Exchange Commission on early reports under the new revenue recognition standard tended to sway companies to revise their reporting.

An analysis of SEC comment letters related to the adoption of Accounting Standards Codification Topic 606 on revenue recognition says 11 companies that adopted the standard ahead of the required effective date promised to revise their language in future filings. The Intelligize report says the research company identified only 32 companies that adopted the standard in 2017 before required to implement in 2018, suggesting roughly one-third made changes to their reporting based on SEC comments.

Alphabet, Google’s parent company, for example, received questions from the SEC about how it identified its performance obligations under ASC 606, especially how it identified when it acted as the principal or agent in a given arrangement, which affects whether revenue is recognized on a gross or net basis. The SEC also asked questions about how the company determined the timing of satisfying performance obligations, how it determined transaction prices, and how it disaggregated revenue. The report shows red-lined changes to the company’s disclosures in its second- and third-quarter filings to show the company altered its language, particularly around its role as a principal in advertising arrangements, to make its control clearer.

Ford Motor Co. faced questions from SEC staff about how it measures and satisfies performance obligations, whether it provides significant payment terms to customers, and how it disaggregates revenues. The company modified its quarterly and year-end reporting to answer the SEC’s questions by adding language to explain it does not have material significant payment terms with its customers and to provide a tabular breakdown of vehicle sales by vehicle type across retail and wholesale channels.

Similarly, Microsoft answered SEC questions about how it measures performance obligations for distinct goods and services by revising language in subsequent quarterly filings to better explain how it applies judgment with respect to on-premises software licenses and cloud services.

Across both early and regular timeline adopters of the new rules, Intelligize says companies in pharmaceuticals and software sectors faced the largest number of SEC comment letters. In fact, 17 percent of all SEC comment letters on ASC 606 targeted companies in those two sectors, the reports says, noting those are the sectors with more complicated license and collaboration agreements and more complicated payment structures.

In examining comment letters specifically to the S&P 500, the report says 46 companies across 32 industries received a total of 116 letters from the SEC, suggesting multiple rounds of comment and response to resolve questions or concerns.