Slow-walking revenue recognition
People have been dreading the new revenue recognition rules that go into effect later this year for a while now. FASB delayed the rule once and, sure, maybe the extra time was necessary, but it also managed to prolong the agony. One guy, you may recall, is worried enough that he wants people to give it some Y2K-esque nickname so everyone catches up to his distress level.
Anyway, for the most anxious of accounting departments, you can breathe again, if only because the SEC isn’t expecting you to get everything perfect out of the gate:
U.S. Securities and Exchange Commission officials indicated that they will hold off on issuing comment letters scrutinizing company compliance with the new revenue accounting standard in the early stages of implementation.
“This is a very big change, it’s very complicated and companies have put a lot of time and effort into this,” said Mark Kronforst, chief accountant in the SEC’s division of corporation finance, speaking Tuesday at the Financial Executives International Current Financial Reporting Issues conference in New York.
“What I hope is that we’re not going to try to regulate this one company at a time,” Mr. Kronforst said, echoing earlier remarks by SEC Deputy Chief Accountant Sagar Teotia.
Oh, boy. Expressing that kind of bad feeling in public almost virtually assures that they’ll be regulating this one company at a time.
“They faced the rigors of the financial crisis… and have also been widely hammered by high and rising house prices, rising student debt and increasing inequality. Millennials are not only likely to experience greater challenges in building their wealth over time, but also greater wealth inequality than previous generations.”
Although I’m sure this run of bad luck will end eventually, for now, it sounds like the easiest way for a millennial to make a small fortune is to inherit a large one and piss it away on pour-over coffee and avocado toast.
The SEC has issued a slew of litigation releases this week, and they’re all pretty standard, featuring people who told investors that they’d invest their money but then just spent it lavishly and engaged in some Ponzi-ish activity.
This one stars a trio of brothers who “did not make any investments with the money, and instead simply stole the investors’ funds.”
Here’s a Georgia man who “used the misappropriated client funds as his own personal piggy bank,” telling one retiree “that he had substantial assets and access to personal funds to fulfill his guarantee when, as alleged, he had no such financial resources.”
And then there’s this weird one where a guy, Michael F. Anderson of Vail, Colo., told everyone that he was:
a retired, successful hedge fund manager who intended to day trade their funds using a proprietary algorithm. Claiming he no longer needed income and instead wanted to help friends and charitable causes, Mr. Anderson falsely told investors that he would fund his wife’s charitable organization for abused women and children
Unfortunately for the investors, the charity was a “sham entity that never conducted any legitimate business.” To make things only slightly weirder, according to the SEC’s complaint, Anderson confessed to most of the illegal activity in an affidavit on February 2nd. And even weirder than that is Mr. Anderson and his wife had divorced in 2009 and remarried on February 7th, five days after his confession.
Previously, on Going Concern…
In other news:
- Federal Tax Reform Pumps the Brakes on Electric Car Incentives; States Zoom Ahead
- Private Equity Chiefs Are Better Tax Targets Than Start-Up Workers
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