✍ Scribed by Weirich, Thomas R.; Rouse, Robert W.
No coin nor oath required. For personal study only.
the staff announced its intention to issue three new Staff Accounting Bulletins (SABs). The proposed pronouncements would address the topics of materiality, recognition of revenue, and restructurings and related liabilities. After a lengthy delay of nine months, the first of the threeÑSAB No. 99, MaterialityÑwas published by the SEC.
Issues that highlighted the concerns of the SEC relating to materiality have included Bank America CorporationÕs delayed announcement of a recent writedown that was tied to a $1.4 billion loan to an investment firm, and W.R. GraceÕs enforcement action concerning Òearnings management.Ó Both companies argue the position that the items were not material and there was no need for an adjustment or disclosure. When the information relating to Bank America was disclosed, its stock plunged 11 percent. In the case of W.R. Grace, the SEC brought enforcement actions against the company and its independent auditors.
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