Given the high profile nature of Boeing’s ongoing saga with the grounding of its 737 MAX aircraft, perhaps it should come as no surprise that the Securities Exchange Commission (SEC) Staff was particularly focused on the company’s disclosure of this issue in its recent review of Boeing’s SEC filings.
In monitoring SEC comment letters, we came across this SEC comment letter exchange with Boeing made public this week where the Staff questions the company about its commitments and contingencies footnote disclosures as required by Accounting Standards Codification (ASC) 450 – Contingencies.
Staff Requests More Disclosures in Contingency Footnote
In its Form 10-Q for the quarterly period ended June 30, 2019, Boeing discloses that it recorded in the second quarter an earnings charge of $5.6 billion, net of insurance recoveries of $500 million, in connection with “estimated potential concessions and other considerations to customers for disruptions related to the 737 MAX grounding and associated delivery delays.”