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SEC may relieve certain entities from revenue, lease adoption dates

Tammy Whitehouse | August 4, 2017

Big 4 firms are telling their clients that the Securities and Exchange Commission won’t object if certain “public business entities” that ought to adopt new rules on revenue recognition and leases with public companies ultimately do so under private company time lines.

Those public business entities would be limited to companies that would otherwise be regarded as private companies except that their financial statements are included in registrant filings for a few different reasons. First, a publicly listed registrant might have an equity method investment in the entity that passes the “significance test” under either Rule 3-09 or Rule 4-08(g) of Regulation S-X and so must be included in the public company’s financial statements. Second, an entity acquired by a public company might be required to include its financial statements with the public company under Rule 3-05 of Reg. S-X.

Normally, entities whose financial statements need to be included with a public company’... To get the full story, subscribe now.