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Instead of issuing standards itself, the SEC is primarily concerned with enforcing accounting and auditing standards in the context of financial statements it receives from public companies under the federal securities laws. It also oversees the Public Company Accounting Oversight Board.

101: Revenue Recognition in Financial Statements ?

In September 2006, the SEC issued ?Staff Accounting Bulletin N. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements?. The major objective of SAB 108 was to eliminate inconsistencies in the treatment of historical accounting errors.

?SAB 99? refers to the U.S. Securities and Exchange Commission Staff Accounting Bulletin No. 99, ?Materiality.? In SAB 99, the staff of the SEC provides guidance on legal and accounting considerations in the interpretation of materiality with respect to financial statement items.

A Staff Accounting Bulletin (SAB) summarizes the views of the Securities and Exchange Commission's staff regarding how Generally Accepted Accounting Principles (GAAP) are to be applied. A common result is that the requirements of an SAB are more conservative and/or restrictive than the GAAP from which they are derived.

In this instance, revenue is recognized when all four of the traditional revenue recognition criteria are met: (1) the price can be determined, (2) collection is probable, (3) there is persuasive evidence of an arrangement, and (4) delivery has occurred.

A Staff Accounting Bulletin (SAB) summarizes the views of the Securities and Exchange Commission's staff regarding how Generally Accepted Accounting Principles (GAAP) are to be applied. A common result is that the requirements of an SAB are more conservative and/or restrictive than the GAAP from which they are derived.