Staff Accounting Bulletin definition
/What is a Staff Accounting Bulletin?
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. Staff Accounting Bulletins are issued by the SEC at relatively long intervals. The complete text of all current SABs are listed on the website of the Securities and Exchange Commission.
Related AccountingTools Course
Public Company Accounting and Finance
At Which Entities are Staff Accounting Bulletins Targeted?
The views stated in an SAB are followed by the staffs of the Office of the Chief Accountant and the Division of Corporate Finance when reviewing the filings of publicly-held companies. For this reason, SABs are closely adhered to by entities registering their securities within the United States. If a publicly-held company does not incorporate the concepts in these bulletins into their financial statements and disclosures, it may receive a comment letter from the SEC.
The information in an SAB does not apply to privately-held organizations or those whose securities are registered on stock exchanges outside of the United States. Thus, the applicability of SAB tends to be limited to a small proportion of the total number of corporations in the United States.
Examples of Staff Accounting Bulletins
Here are several examples of the more important staff accounting bulletins:
SAB No. 1. Codification of Staff Accounting Bulletins. SAB 1 brings together previously issued bulletins into a centralized reference, making them more accessible and easier to apply. It’s essentially the organizational foundation for how SABs are maintained and applied.
SAB No. 99. Materiality. SAB 99 provides guidance on how to evaluate whether a misstatement is material to financial statements. It emphasizes that both quantitative and qualitative factors must be considered—not just numerical thresholds.
SAB No. 101. Revenue Recognition. This bulletin outlines when and how companies should recognize revenue under GAAP. It requires that revenue be recognized only when it is earned and realizable, and provides criteria such as persuasive evidence of an arrangement and delivery having occurred.
SAB No. 104. Revenue Recognition (Update to SAB 101). SAB 104 updates and clarifies SAB 101, aligning revenue recognition with new developments and interpretations. It reaffirms the core principles while providing examples and further detail for applying the guidance in various industries.
SAB No. 118. Income Tax Accounting under the Tax Cuts and Jobs Act. Issued in response to the 2017 tax reform, SAB 118 provides temporary guidance for companies implementing the new tax law. It allows companies to use reasonable estimates in certain cases while final calculations are being completed.