![]() ![]() ![]() Handling segment income or expense line items without hewing to GAAP principles.But try one formula here and another there across multiple segments, and you are likely asking for a comment letter. Calculate one segment’s profit differently than GAAP and you might be fine under ASC 280. Using varying approaches to measure segment profit or loss.Presenting a segment’s revenue exclusive of discounts and returns that they must deduct under GAAP.So, what exactly are filers doing to draw the staff’s ire? Here are some examples: If yours is one of those companies…well, this conference put you on notice. Yet more companies are reporting enterprisewide revenue by shuffling segment treatments in a way that is inconsistent with GAAP, the Division staff warned. Inaccurate reporting of revenue is like sucking bone marrow from regulators and investors. ![]() The Division staff simply won’t consider that result to be “revenue.” Subtracting certain revenue-reducing amounts from GAAP revenue and reporting it as non-GAAP “net revenue.” That really isn’t “revenue ” you might persuade the SEC to accept “adjusted gross profit,” although even that is not a given. Deputy Chief Accountant Patrick Gilmore made the staff’s position crystal-clear by warning of objections to:Īdding back sales discounts, return allowances, and other concessions to revenue as adjusted gross sales. In case you hadn’t heard, the SEC Division of Corporation Finance staff takes a very dim view these days when it comes to attempted adjustments to GAAP revenue. The following are my thoughts on some of the most relevant discussions. Have no fear: I attended and tried hard to miss nothing of import, from the Guns N’ Roses intro music to some meaty trends and issues discussed by the SEC staff. Even as a fully virtual event, the AICPA’s annual conference on SEC and PCAOB issues in December may not have fit your busy schedule. ![]()
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