2020 SEC comment letter trends

11/24/20 • 37 min

To help you prepare your year-end financial statements, listen to PwC partners Heather Horn, Ryan Spencer, and Kyle Moffatt give their observations from SEC comment letters made public in 2020. In addition to discussing top areas of interest—including COVID-19, revenue recognition, non-GAAP, MD&A, and segment reporting—they also provide a few best practices for responding to SEC comments.
Topics include:

0:46 - Overview. As former Chief Accountant and Disclosure Program Director in the SEC’s Division of CorpFin, Kyle shares his unique perspective on the SEC’s filing review program and all the parties involved.
10:27 - Overall trends. Ryan shares his observations with respect to the overall trends in SEC comment letters in 2020, including:
- 13:16 - MD&A
- 17:07 - COVID-19
- 18:46 - Non-GAAP
- 25:37 - Revenue recognition
- 27:29 - Segment reporting
31:02 - Best practices. Before wrapping up, Ryan and Kyle provide a handful of best practices on the most effective way to respond to comment letters.

Ryan Spencer is a Partner at PwC's National Office specializing in SEC financial reporting. He has over 20 years of experience serving clients and is a frequent contributor to PwC’s publications and communications.

Kyle Moffatt is a partner in PwC's National Office where he consults with engagement teams and audit clients on SEC reporting matters. He joined PwC in April 2020 after spending almost 20 years with the SEC, most recently as Chief Accountant and Disclosure Program Director in the Division of Corporation Finance.

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.
Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

0:46 - Overview. As former Chief Accountant and Disclosure Program Director in the SEC’s Division of CorpFin, Kyle shares his unique perspective on the SEC’s filing review program and all the parties involved.
10:27 - Overall trends. Ryan shares his observations with respect to the overall trends in SEC comment letters in 2020, including:
- 13:16 - MD&A
- 17:07 - COVID-19
- 18:46 - Non-GAAP
- 25:37 - Revenue recognition
- 27:29 - Segment reporting
31:02 - Best practices. Before wrapping up, Ryan and Kyle provide a handful of best practices on the most effective way to respond to comment letters.

Previous Episode

What’s next in tech for finance? Investing in the cloud

Technology continues to reshape our world and has been accelerated by the pandemic. As you rethink processes for the new environment, you may be asking how technology can help improve efficiency and effectiveness. This podcast is the next episode in the second season of our What’s next? podcast series for CFOs, controllers — anyone in finance. This season we’re focusing on what’s next in tech for the finance professional — discussing the benefits of technology through the lens of the finance function. In this episode, host Heather Horn sits down with Paul Gaynor, leader of PwC’s Technology Consulting and Alliances businesses, and Scott Behrens, a PwC partner and information technology leader, to better understand the ways cloud-based business solutions are modernizing the workday.
Topics include:

1:00 - How businesses are using cloud technology. Whether it’s better analytics and the presentation of data, or having the ability to quickly develop new applications, we begin with an overview of how the cloud is transforming the way businesses run.
4:25 - Solving today’s problems. Every functional area within the business can leverage cloud capabilities to drive transformation and growth. We discuss how cloud technologies have evolved from being just a cost-saving play.
11:49 - Adopting a new way of working. As businesses move into the cloud, it’s important to manage this new investment. We discuss the behaviors and procedures organizations should have in place.
28:55 - The future of cloud technology. Cloud technology has given organizations the opportunity to rethink how to run their business—and that’s exciting. We close with a look at how the cloud will drive new products, business models, and a digitally-enabled workforce.

Paul Gaynor is the Global Technology and Alliance Consulting Leader with responsibility for setting PwC’s network Technology and Alliance Consulting vision and strategy. Previously, Paul led the US Technology Sector and Management Consulting capabilities for Technology, Information Communication and Entertainment, and Consumer, Industrial Products sectors. In addition, Paul served as the Global Relationship Partner for several Technology clients, and was team member in building PwC’s working capital and revenue assurance businesses.

Scott Behrens is a PwC partner with Strategy& and its Information Technology leader. With proven credentials in technology strategy and the alignment of IT strategies with associated business goals, Scott has extensive experience improving business performance through the design of new strategies and the creation of new capabilities and assets that support sustained value. Scott has significant experience in the analysis of process and technology architectures and in the quantification and direct capture of business benefits for the continued success of an organization.
Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.
Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

Next Episode

Payments to customers? Receipts from vendors? Help!

The accounting is relatively straightforward when cash is received from a customer or paid to a vendor. But what if you receive cash from the vendor or pay the customer? When everything is reversed, the accounting is not as easy and it may be more common than you expect. In this episode, Angela Fergason and Jay Seliber, partners in PwC’s National Office, join host Heather Horn to help you think through the accounting implications.
Topics include:

0:44 - Overview. Before we begin navigating the accounting guidance, we set the stage by talking about why this topic generates so many questions and share common examples of transactions when this might occur.
4:50 - Consideration paid to a customer (ASC 606). Angela explains the vendor’s accounting when payments are made to a customer, touching on related judgments and the timing of recognition.
15:59 - Consideration received from a vendor (ASC 705-20). Switching gears, Jay walks us through the guidance for situations when a customer receives money from a vendor, touching on the different models and sharing illustrative examples.
29:52 - Final reminders. We close by sharing helpful reminders, highlighting the importance of assessing all of the relationships involved and not merely jumping to a default model.

Angela Fergason is a partner in PwC's National Office with over 20 years of experience who specializes in accounting for revenue and employee compensation arrangements. She is a frequent speaker on accounting and financial reporting topics and is a contributor to many PwC National Office publications, including our accounting guides on revenue and stock-based compensation.

Jay Seliber is a partner in PwC’s National Accounting Services group with over 30 years of experience. He helps clients with their most complex accounting matters, particularly in the areas of revenue recognition, M&A, stock compensation, employee benefits, restructurings, impairments, and financing transactions.