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4557

Public Company Financial Executive Briefing

SEC Issues Amendments to SAB Codification to

Conform to the FASB Codification
By Jim Pitrat, CPA - Practice Leader, Assurance & Advisory Practice TUESDAY, APRIL 5, 2011

INTRODUCTION AND SUMMARY

The SEC issued Staff Accounting Bulletin (SAB) No. 114 to amend the SAB Codification. The new SAB is intended to make the SAB
codification consistent with the FASB’s ASC (Accounting Standards Codification).

SAB CODIFICATION CHANGES

The changes are not designed to be significant and primarily involve adjusting and changing reference,
terminology and minor formatting adjustments. The changes are not intended to alter existing Staff
guidance.

A summary of some of the keychanges follows:

Topic 1: Financial Statements:

1. Topic 1D now states that certain disclosures are required only if the basis of accounting applied in the financial statements of a foreign issuer is other
than U.S. GAAP or International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

2. Topic 1K (Financial Statements of Acquired Troubled Financial Institutions), now states that goodwill is no longer subject to amortization and replaces
the term “carrying value” with the term “fair value.”

Topic 5: Miscellaneous Accounting:

1. Topic 5F (Accounting Changes Not Retroactively Applied Due to Immateriality), the SAB has replaced “retrospectively” “restatement”
and “retroactively” has been updated with the terms, “respectively”, and “retrospective adjustment.”

Topic 6: Interpretations of Accounting Series Releases and Financial Reporting Releases:

1. Topic 6K (Accounting Series Release 302 — Separate Financial Statements Required by Regulation S-X), has been changed to
represent that goodwill is not amortized. Instead, it is subject to impairments.

Topic 13: Revenue Recognition:

1. Topic 13A (Selected Revenue Recognition Issues): The Contingent Rental Income discussion has been to conform to FASB ASC Topic
840, Leases.

continued on page 2
Topic 14: Share-Based Payment:

The following topics have been eliminated:

• Topic 14G (Non-GAAP Financial Measures), has been removed).

• Topic 14H (First-Time Adoption of Statement 123(R) in an Interim Period).

• Topic 14J (Accounting for Income Tax Effects of Share-Based Payment Arrangements upon Adoption of Statement 123(R)).

• Topic 14K (Modification of Employee Share Options Prior to Adoption of Statement 123(R)).

• Topic 14M (Disclosures in MD&A Subsequent to Adoption of Statement 123(R)).

• Topic 14L (Application of the Measurement Provisions of Statement 123(R) to Foreign Private Issuers).

FOR FURTHER INFORMATION, PLEASE CONTACT ONE OF THE FOLLOWING:

Jim Pitrat:  Harmeet Singh:  Gale Moore:  
JPitrat@singerlewak.com  HSingh@singerlewak.com  GMoore@singerlewak.com 
310.477.3924 408.294.3924 949.261.8600 
Practice Leader Business Combinations Subject Matter Expert  Business Combinations Subject Matter Expert 
Assurance & Advisory Los Angeles, Silicon Valley  Orange County, San Diego