The older SAE J607 standard is 60°F, 29.92in-Hg, and 0% humidity. Which is now being used in the STD correction formula on most dynos.
The newer SAE J1349 standard of correction use 77°F, 0% humidity 29.23 in-Hg.
The J1349 is the currently accepted correction for SAE standard.
I've heard of and seen the standard and I'm sure there may be some shops and teams that do use it. Not sure they would find it acceptable to assume an X% mechanical loss using the J1349. BSFC would be better to use along with the J607. My humble opinion. Not necessarily disagreeing. I would be interested in how they determine a fixed mechanical efficiency?
We still used the J607 at the School of Automotive Machinists. Like any engine or chassis dyno, just a tool to see what works and as long as you use the same standard...you're good. Now going to Engine Masters, our engine would easily pick up 30ish hp on their dyno...so another variable there.
Now...on the other hand, an oem production engine, sure. They have a large budget.