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Division of Corporation FinanceFinancial Reporting ManualDisclaimer: This Manual was originally prepared by the staff of the Division of Corporation Finance toserve as internal guidance. In 2008, in an effort to increase transparency of informal staff interpretations,the Division posted a version of the Manual to its website. Because of its informal nature, the Manualdoes not necessarily contain a discussion of all material considerations necessary to reach an accountingor disclosure conclusion. Such conclusions about a particular transaction are very fact dependentand require careful analysis of the transaction and of the relevant authoritative accounting literatureand Commission requirements. The information in this Manual is non-authoritative. If it conflicts withauthoritative or source material, the authoritative or source material governs. The information presentedalso may not reflect the views of other Divisions and Offices at the Commission. The guidance is nota rule, regulation or statement of the Commission and the Commission has neither approved nordisapproved this information. The information included in this Manual may be updated from timeto time and positions may change. As a result, the information in this manual may not be current.
SUMMARY OF CHANGES IN CURRENT UPDATESections of the Financial Reporting Manual have been updated as of July 1, 2019. Thesesections have been marked with the date tag, “Last updated: 7/1/2019,” to identify thechanges. Previous updates are marked using the same convention and represent the lastrevision to that section. We include a date tag when the change is significant. Changesthat are administrative in nature (for example, section reference updates or grammaticalimprovements) are not marked with a date tag.Below is a summary of changes included in this update and a brief description of thechange. Clicking the linked section number will direct you to the location of the changein the document. You may click on the embedded link in the document to return to thispage.Section1610Topic 2, 2020.12030.1, 2030.352401011011100, 11200CommentRemoved guidance related to the impact of adopting new accounting standardson selected financial data.Updated to clarify application of Rule 3-13 and Note 5 to Rule 8-01 ofRegulation S-X.Removed. Requests to omit financial statements should be submitted throughRule 3-13 waiver process.Consolidated information with Note to Topic 2.Updated revenue threshold for EGCs pursuant to SEC Release 33-10332.Technical amendment to replace references to ASU No. 2014-09 and ASU No.2016-02 with ASC Topics.1
COMMUNICATIONS WITH THE DIVISION OF CORPORATIONFINANCE’S OFFICE OF CHIEF ACCOUNTANT (CF-OCA)(Last updated: 7/1/2019)CF-OCA performs the following functions that may result in communications withcompanies and their advisors: Acts on behalf of the Commission to grant relief under Rule 3-13 of Regulation S-X.The staff has authority, where consistent with investor protection, to permitregistrants to omit, or substitute for, required financial statements. Requests for thisrelief should be submitted by email. Call (202) 551-3111 and ask for the appropriateperson listed below to discuss questions about potential relief:Rules 3-05 and 8-04– Jaime JohnArticle 11 and Rule 8-05 – Todd HardimanRules 3-09 and 4-08(g) – Christy AdamsRules 3-10 and 3-16 – Jarrett TornoRules 3-14 and 8-06 – Jessica Barberich Answers interpretive request letters and provides informal interpretive advice aboutthe form and content of financial statements and other financial information requiredto be included in Commission filings. Requests for interpretive letters should besubmitted by email. Requests for informal interpretive advice should be submitted byonline form or by calling (202) 551-3400. While the statements made by the staff onthe telephone are intended to be helpful to the persons making the inquiries, they arenot binding due to their informal nature. Helps identify and explain the applicable rules, regulations, forms, and guidance thataffect the form and content of financial statements and other financial informationrequired to be included in Commission filings. Requests for this assistance should besubmitted by online form or by calling (202) 551-3400.2
TABLE OF CONTENTSEXPLANATION OF ABBREVIATIONSTOPIC 1:REGISTRANT’S FINANCIAL Financial Statements and Schedules in Registration and Proxy StatementsAudited Annual Financial StatementsUnaudited Interim Period Financial StatementsSupplemental SchedulesProxy StatementsBank Reorganizing under Newly-formed Holding CompanyRecently Organized RegistrantPredecessor Financial Statements[Reserved]Supplemental and Restated Financial Statements Related to Post Balance Sheet Events120012101220Age of Financial Statements in Registration or Proxy StatementsStaff ReviewAge Requirements13001310132013301340Periodic Reporting Requirements (Exchange Act Filings)Companies Required to ReportFinancial Statements RequiredExchange Act Report Due DatesAccelerated and Large Accelerated Filer Status: Entering, Exiting andImplications1350 [Reserved]1360 Changes in Fiscal Year – General1365 Changes in Fiscal Year – Implementation Guidance1370 Combined Periodic Reporting140014101420143014401450General Considerations (All Filings)Basis of Reporting[Reserved]Guaranteed SecuritiesFiscal Years Differing by 93 Days or LessFiscal Year Presentation1500Interim Period Reporting Considerations (All Filings)160016101620Selected Financial Data (All Filings)[Reserved]Selected Quarterly Financial Data Not Required3
TOPIC 2:200020052010201520202025OTHER FINANCIAL STATEMENTS REQUIRED206020652070Businesses Acquired or to be AcquiredDefinitions and RequirementsDetermination of a BusinessMeasuring Significance – BasicsImplementation Points – Amounts Used to Measure SignificanceImplementation Points – Financial Statements Used to MeasureSignificanceFinancial Statement Periods Required Under S-X 3-05 and S-X 8-04Individually Insignificant AcquireesWhen to Present Financial StatementsAge of Financial Statements – BasicsAge of Financial Statements – Interaction of S-X 3-05(b)(4) andInstruction to Item 9.01 of Form 8-KForeign Business, Hostile Tender Offers, and Troubled FinancialInstitutionsFlowchart Overview of S-X 3-05Acquisitions of Selected Parts of an EntitySAB 80: Application of S-X 3-05 in Initial Registration Statements2100211021202130Disposition of a BusinessDefinitionsWhen are Financial Statements Required?Form 8-K – Measuring Significance of a Disposed Business2200Financial Statements of Target Companies in Form S-42030203520402045205020552300 Real Estate Acquisitions and Properties Securing Mortgages2305 Real Estate Operations - Overview2310 Real Estate Operations – When to Present Financial Statements2315 Real Estate Operations – Measuring Significance2320 Real Estate Operations – Individually Insignificant Acquisitions2325 Real Estate Operations – Special Requirements for “Blind Pool”Offerings2330 Real Estate Operations – Required Financial Statements2335 REIT Formation Transactions2340 Properties Subject to Triple Net Lease2345 Properties Securing Loans, which in Economic Substance Represent anInvestment in Real Estate, including Acquisition Development andConstruction (ADC) Arrangements2350 Properties Securing Loans that Represent an Asset Concentration [SAB Topic1I]2355 Gains/Losses on Sales or Disposals by Real Estate Investment Trusts2360 Proxy Statements for Acquisitions of Real Estate Operating Properties4
2400 Equity Method Investments, Including Fair Value Option2405 Required Financial Statements2410 Measuring Significance2415 Combined/Consolidated Financial Statements of Investees2420 Summarized Financial Data – Registrants Subject to S-X2425 “Foreign Business” Investees2430 Relief2435 SFAS 159 [ASC 825] Fair Value Option for an Equity Method Investment andS-X 3-09 and S-X 4-08(g)2500 Guarantors of Securities2510 Exceptions to the General Rule2515 Condensed Consolidating Financial Information2520 Implementation Issues2530 Recently Acquired Guarantor Subsidiaries2540 Periodic Reporting by Subsidiary Issuers and ing “Substantial Portion of the Collateral”When Financial Statements are RequiredImplementation Issues2700 Credit – Third Party Financial Statements2705 Asset-Backed Securities – Presentation of Certain Third Party FinancialInformation2710 Third Party Credit Enhancements for Securities that are NOT her Financial StatementsGeneral Partner, Where Registrant is a Limited PartnershipParent-Only Financial Statements (Condensed)Financial Statements of a Significant CustomerSubstantial Asset ConcentrationTOPIC 3:3100311031203130314031503160PRO FORMA FINANCIAL INFORMATIONCircumstances Requiring Pro Forma PresentationsSignificant Business CombinationDisposition of a Significant Portion of a BusinessAcquisition of One or More Real Estate OperationsRoll-Up TransactionRegistrant Previously was Part of Another EntityOther5
n Requirements – Form and ContentObjectivePro Forma Condensed Balance SheetPro Forma Condensed Income StatementFormIn Business CombinationsPro Forma Presentations Reflecting Debt FinancingTax EffectsEffects of New Contractual Arrangements“Carved Out” Businesses33003310332033303340Special Problems and IssuesCommon Pro Forma Preparation ProblemsProhibition on Assuming Offering ProceedsCombining Entities with Different Fiscal YearsHistorical Results Include Unusual Events3400 Special Applications3410 Sub-Chapter S Corporations and Partnerships3420 Distributions to Promoters/Owners At or Prior to Closing of IPO3430 Other Changes in Capitalization At or Prior to Closing of IPO3440 Pro Forma Requirements for Real Estate and Leasing Operations3500 Projections and Financial Forecasts3510 Alternative to Pro Forma Statements3520 Presentation Requirements360036103620OtherPro Forma Disclosures Required by GAAPFilings Subsequent to an IPOTOPIC 4:4100411041154120INDEPENDENT ACCOUNTANTS’ INVOLVEMENT41304140Qualifications of AccountantsPCAOB RegistrationInvoluntary PCAOB DeregistrationDuly Registered and in Good Standing Under the Laws of the Accountant’sPlace of Residence or Principal OfficeIndependencePrincipal Auditor4200421042204230Accountants’ ReportsGeneral – Audit ReportsQualified Audit ReportsOther Report Modifications6
430043104320Report on Internal Control over Financial ReportingManagement’s Annual Report on Internal Control over Financial ReportingAuditor’s Report on ICFR4400441044204430Review and Compilation ReportsReview Reports on Interim or Pro Forma DataSelected Quarterly Financial DataCompilation Reports4500451045204530Change in AccountantsChange in AccountantsUnusual Issues Involving Changes in AccountantsAdditional Guidance4600Non-Reliance on Previously Issued Financial Statements or Related AuditReport or Completed Interim Review4610 Non-Reliance on Previously Issued Financial Statements4620 Non-Reliance on Previously Issued Audit Report or Completed Interim Review4630 Other – Prior Disclosures Regarding Disclosure Controls and Procedures4700 “To Be Issued” Accountant’s Reports4710 Contingent Upon Future Event or Transaction4720 Contingent Upon Future Underwriting Agreement4800 Other Matters4810 Consents to the Use of Audit Reports4820 Accountant’s Inability to Reissue Reports4830 Successor Auditor Reports4840 Accountant’s Refusal to Reissue Reports4850 Illegal Acts4860 Signatures4870 Selected Financial DataTOPIC 5:SMALLER REPORTING COMPANIES5100 Definition and Eligibility5110 Eligibility as a Smaller Reporting Company5120 Determination5130 Shell Company5200 Other Eligibility Issues5210 Financial Statements Required Pursuant to S-X 3-05 or 3-095220 Business Acquisitions5230 Reverse Acquisitions7
530053105320533053405350Form and Content Disclosure Required by Regulation S-X are NotApplicableGeneralPro Forma InformationSignificant Equity InvesteesA la Carte Approach to DisclosureRestricted Net AssetsTOPIC 6:FOREIGN PRIVATE ISSUERS & FOREIGN BUSINESSES6000[Reserved]610061106120Definitions and Basic RulesDefinitionsBasic Rules6200 General Financial Statement Requirements for Foreign Private Issuers6210 Periods for which Financial Statements are Required6220 Age of Financial Statements in a Registration Statement6230 Updating of Financial Statements in Delayed or Continuous Offerings6240 Due Dates for Annual Reports on Form 20-F6250 Changes in Fiscal Year6260 Ratio of Earnings to Fixed Charges6270 Capitalization Table6300 IFRS6310 Acceptance of IFRS as Issued by the IASB without Reconciliation to U.S.GAAP6320 Implementation Issues – IFRS Filers6330 Interim Financial Statements Presented by IFRS Filers6340 First-time Adopters of IFRS6345 First-time Adopters that Previously Used U.S. GAAP for the Primary FinancialStatements in SEC Filings6350 IFRS Filers – Financial Statements of Other Entities6360 IFRS Filers – Article 11 Pro Forma Information6400 Requirement for Reconciliation to U.S. GAAP6410 Requirement for Reconciliation6420 Selected Financial Data65006510652065306540Content of Reconciliation to U.S. GAAPItem 17 RequirementsItem 18 RequirementsStatements of Comprehensive IncomeAccommodations Permitted by Form 20-F8
66006610662066306640Selection of a Reporting CurrencyCurrency of MeasurementDisclosures, if the U.S. Dollar is Not the Reporting CurrencyChange in Reporting CurrencyReporting Currency for Domestic Registrants and Non-Foreign Private Issuers670067106720Price-Level Adjusted Financial Statements and Effects ofHyperinflationary EnvironmentsRequirementsPreparation of Price-level Adjusted Financial Statements6800681068206830Foreign Auditor MattersQualifications and IndependenceReportsDisclosure of Change in Accountants and Disagreements6900[Reserved]TOPIC 7:RELATED PARTY MATTERS7100[Reserved]720072107220Expenses Incurred on Behalf of RegistrantReflecting All Costs of Doing BusinessCompensation Arrangements73007310732073307340Transfers and Receivables to or from ShareholdersTransfer of Nonmonetary AssetsReceivablesDistributions to or from Major Shareholders Prior to OfferingOffering Proceeds7400741074207430Components of Larger EntitiesFinancial Statement RequirementsStatements of Revenues and Direct ExpensesPro Forma Financial Statement Requirements750075107520Compensation IssuesStock CompensationValuation of Privately-Held-Company Equity Securities Issued asCompensation9
TOPIC 8:NON-GAAP MEASURES OF FINANCIAL PERFORMANCE,LIQUIDITY AND NET WORTH8100 Use of Non-GAAP Financial Measures8110 Applicable Guidance8120 Definition of a Non-GAAP Financial Measure8130 General Applicability and Requirements of Regulation G and S-K 10(e)8140 General Application of Regulation G and S-K 10 to Foreign Private Issuers8150 [Reserved]8160 [Reserved]8170 o of Earnings to Fixed ChargesRequired DisclosureDefinition of Fixed ChargesDividend RequirementsDefinition of EarningsEquity in Investee’s LossesPro Forma Effect of RefinancingForeign Private IssuerExhibit 128300831083208330Tangible Book Value per SharePresentation of Net Tangible Book Value per ShareDefinitionStaff PracticeTOPIC 9:MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIALPOSITION AND RESULTS OF OPERATIONS (MD&A)91009110MD&A ObjectivesOverall Objectives92009210922092309240925092609270General RequirementsLiquidity and Capital ResourcesResults of OperationsOff-balance Sheet ArrangementsTabular Disclosure of Contractual ObligationsInterim Period RequirementsSafe Harbor ProvisionsSAB Topic 11M (SAB 74)9300[Reserved]94009410Foreign Private IssuersForeign Private Issuers10
950095109520Critical Accounting EstimatesGoodwill ImpairmentShare-based Compensation in IPOs9600 Related Party Transactions9610 Related Party Transactions9700Fair Value Measurements9800981098209830Other ItemsS-X 3-05 and 3-09S-X 3-10 and 3-16Registration and Proxy Statements99009910Additional GuidanceAdditional Guidance Provided in Respect of MD&ATOPIC 10: EMERGING GROWTH COMPANIES10100 Eligibility10110 Eligibility as an EGC10120 Other Eligibility Issues1020010210102201023010240Scaled Disclosure ProvisionsGeneralFinancial Reporting AccommodationsAccounting Standards Transition Period AccommodationInternal Control Over Financial Reporting [SOX 404] Accommodation10300103101032010330Foreign Private IssuersGeneralNumber of Years Registrant Financial Statements to be Presented under IFRSMulti-Jurisdictional Disclosure System (“MJDS”)TOPIC 11: REPORTING ISSUES RELATED TO ADOPTION OF NEWACCOUNTING STANDARDS11100 New Revenue Standard (FASB ASC Topic 606)11110 Registrant Financial Information11120 Financial Statements of Other Entities and Significance11200 New Leasing Standard (FASB ASC Topic 842)11210 Registrant Financial Information11
11300 New Disclosures About Short-Duration Contracts For Insurance Entities(FASB ASC Topic 944)11310 Registrant Financial InformationTOPIC 12: REVERSE ACQUISITIONS AND REVERSERECAPITALIZATIONS12100 g IssuesGeneralForm 8-KChange in AccountantsChange in Fiscal YearAuditor IssuesRegistration and Proxy Statements for Mergers, Acquisitions and SimilarTransactionsTOPIC 13: EFFECTS OF SUBSEQUENT EVENTS ON FINANCIALSTATEMENTS REQUIRED IN FILINGS13100 General13200 Discontinued Operations13300 Changes in Segments13400 Change in the Reporting Entity or a Business Combination Accounted forin a Manner Similar to a Pooling of Interests13500 Stock Splits13600 Measurement Period Adjustments13610 Financial Statement Requirements in Registration Statements Pursuant toRetrospective Adjustments to Provisional Amounts in a Business CombinationTOPIC 14: TENDER OFFERS14100 Regulatory Schemes14200 Documents Filed14300 Cash Offer Financial Statement Requirements14310 Financial Statement Requirements of Schedule TO14320 Financial Statement Requirements of Schedule 13E-312
14400144101442014430Item 1010 of Regulation M-A: Financial StatementsFinancial Information – Item 1010(a)Pro Forma Information – Item 1010(b)Summary Information – Item 1010(c)TOPIC 15: EMPLOYEE STOCK BENEFIT PLANS15100 Filing Requirements of Form S-8 and Form 11-K15110 Employee Benefit Plan a Separate Registrant15120 Financial Statement Requirements15200152101522015230Exchange Act Age of Financial Statements RequirementsGeneral RequirementPlans Subject to ERISAForm 8-K RequirementsTOPIC 16: MULTIJURISDICTIONAL DISCLOSURE SYSTEM16000 General161001611016120161301614016150MJDS Offerings – Eligibility RequirementsRights OfferExchange OfferBusiness CombinationsOfferings of Investment Grade Non-Convertible Debt or Preferred SecuritiesOfferings of Other Securities16200 Registration and Periodic Reporting under the Exchange Act16210 Forms 40-F and 6-K16300 Tender Offers16310 Eligibility Requirements16320 U.S. Ownership Ceiling16400 Canadian Regulation16500 Sarbanes-Oxley16600 Auditor IndependenceINDEX13
EXPLANATION OF FASBFINFPIFRCFRRGAAPGAASIASIASBICFRIFRSIPOJOBS ActLPMD&AMJDSOCAOCCOMAAccounting Standards Executive Committee of the AICPAAcquisitions, Development and ConstructionAmerican Institute of Certified Public AccountantsAccounting Principles Board OpinionAccounting Research BulletinPublic Company Accounting Oversight Board Auditing StandardFASB Accounting Standards CodificationFASB Accounting Standards Codification Master GlossaryAccounting Series ReleaseCodification of Statements on Standards for AttestationEngagementsCodification of Statements on Auditing StandardsDivision of Corporation Finance Compliance and DisclosureInterpretationsCenter for Audit QualityDivision of Corporation Finance, Office of Chief AccountantDivision of Corporation Finance, Office of Chief CounselDivision of Corporation Finance, Office of Mergers and AcquisitionsFASB Concepts StatementCommittee of Sponsoring Organizations of the Treadway CommissionDisclosure Controls and ProceduresSEC’s Electronic Data Gathering, Analysis, and Retrieval systemEmerging Growth CompanyFASB’s Emerging Issue Task Force (by issue #)Earnings Per ShareFinancial Accounting Standards BoardFASB InterpretationForeign Private IssuerCodification of Financial Reporting PoliciesSEC Financial Reporting ReleaseGenerally Accepted Accounting Principles (in the U.S.)Generally Accepted Auditing Standards (in the U.S.)International Accounting StandardsInternational Accounting Standards BoardInternal Control over Financial ReportingInternational Financial Reporting StandardsInitial Public OfferingJumpstart Our Business Startups ActLimited Partner(s)Management’s Discussion and AnalysisMultijurisdictional Disclosure SystemSEC’s Office of the Chief AccountantDivision of Corporation Finance, Office of Chief CounselDivision of Corporation Finance, Office of Mergers and AcquisitionsBack to Table of Contents14
OPEBPCAOBPP&EREITSABSAB TopicSASSECSFASS-KSOPSOXSRCS-TS-XWKSIOther Post Employment BenefitsPublic Company Accounting Oversight BoardProperty, Plant and EquipmentReal Estate Investment TrustStaff Accounting BulletinCodification of Staff Accounting Bulletins (by topic)AICPA Statement of Auditing StandardsU.S. Securities and Exchange CommissionFASB Statements of Financial Accounting StandardsRegulation S-KAICPA Statement of PositionSarbanes-Oxley Act of 2002Smaller Reporting CompanyRegulation S-T (EDGAR)Regulation S-XWell-Known Seasoned IssuerBack to Table of Contents15
TOPIC 1REGISTRANT’S FINANCIAL STATEMENTSThis topic describes the type and age of financial statements and schedules aregistrant (or predecessor of the registrant) must include in registration andproxy statements and periodic reports.1100 FINANCIAL STATEMENTS AND SCHEDULES INREGISTRATION AND PROXY STATEMENTS(Last updated: 9/30/2008)1110Audited Annual Financial Statements1110.1General Requirements for a Domestic Registrant(Last updated: 6/30/2013)Required audited financial statements for a domestic registrant, other than anEGC, in registration or proxy statements. See Topic 10 for EGCs.SmallerReportingCompanies 1Reg. S-X [8-02]Other ReportingCompaniesReg. S-X [3-01, 302, 3-04]Balance Sheet2 fiscal year-ends2 fiscal year-endsIncome Statement 22 years3 yearsCan be presented in a singlecontinuous statement withcomprehensive income (seebelow).ComprehensiveIncome2 years3 yearsCan be presented in a singlecontinuous financial statementwith the income statement or intwo separate but consecutivefinancial statements. An entityreporting comprehensive incomein a single continuous statementmust present its components intwo sections, net income andother comprehensive income[ASC 220-10-45-1 and 1A].StatementNotes1See Topic 5 for eligibility criteria of Smaller Reporting Companies.Requirements to present an income statement shall be interpreted to mean the statement of comprehensiveincome, presented in one of the two formats discussed in the comprehensive income box.2Back to Table of Contents16
StatementSmallerReportingCompaniesReg. S-X [8-02]Other ReportingCompaniesReg. S-X [3-01, 302, 3-04]NotesChanges in2 yearsStockholders’ Equity3 yearsCan be presented in a note to thefinancial statements.Cash Flow3 yearsPresented for same periods as anincome statement, as required byASC 230-10-15-3.2 yearsNOTE to SECTION 1110.1For public entities, the amendments in ASU 2011-05,Comprehensive Income (Topic 220): Presentation ofComprehensive Income, and ASU 2011-12, ComprehensiveIncome (Topic 220): Deferral of the Effective Date forAmendments to the Presentation of Reclassifications of Items Outof Accumulated Other Comprehensive Income in AccountingStandards Update No. 2011-05, are effective for fiscal years, andinterim periods within those years, beginning after December 15,2011 with early adoption permitted. The guidance must be appliedretrospectively for all periods presented in the financial statements.(Last updated: 12/31/2011)1110.2Exceptions and Special Casesa. Unaudited fiscal year-end data may be provided under certaincircumstances. [SAB Topic 1C]b. An income statement may be omitted if income and expense throughthe balance sheet date are nominal, but an audited footnote shouldsummarize any activity.c. A change in fiscal year requires transition period financial statements.Refer to Section 1360.Back to Table of Contents17
1120Unaudited Interim Period Financial Statements(Last updated: 12/31/2011)Required unaudited interim period financial statements [S-X Articles 3 and 10,or S-X 8-03 for Smaller Reporting Companies] for a domestic registrant to bepresented in registration or proxy statements:StatementBalance SheetPeriods RequiredAs of interim date no more than 134days (for non-accelerated filers, or 129days for accelerated and largeaccelerated filers) before effectivenessor mailing.NotesSee Section 1340 forsummary of acceleratedfiler rule.Income Statement 3 For period from the latest fiscal yearend to the interim balance sheet date,and for the corresponding period in theprior fiscal year.Present in a format similarto that described for annualreporting in Section1110.1.ComprehensiveIncomeSame as income statement.Present a total forcomprehensive income incondensed financialstatements of interimperiods in a singlecontinuous statement or intwo consecutivestatements.Cash FlowSame as income statement.Same as income statement.Changes inStockholders’EquityFor period from the latest fiscal yearend to the interim balance sheet date.Can be presented in a noteto the financial statements.3Requirements to present an income statement shall be interpreted to mean the statement of comprehensiveincome, presented in one of the two formats discussed in the comprehensive income box.Back to Table of Contents18
NOTE to SECTION 1120For public entities, the amendments in ASU 2011-05,Comprehensive Income (Topic 220): Presentation ofComprehensive Income, and ASU 2011-12, ComprehensiveIncome (Topic 220): Deferral of the Effective Date forAmendments to the Presentation of Reclassifications of Items Outof Accumulated Other Comprehensive Income in AccountingStandards Update No. 2011-05, are effective for fiscal years, andinterim periods within those years, beginning after December 15,2011 with early adoption permitted. The guidance must be appliedretrospectively for all periods presented in the financial statements.(Last updated: 12/31/2011)1130Supplemental Schedules [Article 12]1130.1General RequirementsGenerally required for fiscal years or year-ends as specified by the applicablearticle of Regulation S-X. Registrants can file their Article 12 financialstatement schedules by amendment within 30 days following the due date oftheir Form 10-K [General Instruction A.4 of Form 10-K]. (Last updated:12/31/2010)1130.2ExceptionsNot requireda. for Smaller Reporting Companies.b. in proxy statements, except certain schedules are required forinsurance and real estate companies. [Schedule 14A Item 13Instruction 3]1140Proxy Statements1140.1Annual MeetingAn annual report to shareholders containing audited financial statements for themost recently completed year must accompany or precede a proxy statementrelating to an annual meeting at which officers and directors will be elected.1140.2Other SolicitationsFinancial statements may be required where action is taken to authorize, issue,exchange or modify securities, including when the authorization or issuance isin connection with a business combination. However, financial statements areBack to Table of Contents19
not required if they would not be material for the exercise of prudent judgmentconcerning the action. Financial statements usually are considered material tothis exercise if the action is the authorization or issuance of a material amountof senior securities or the authorization or issuance of securities related to abusiness combination. [Instructions to Schedule 14A Item 13]1140.3Business Combinations(Last updated: 11/9/2016)The requirement for acquirer and target financial statements in proxy statementsdepends on whose proxies are solicited and the nature of the consideration. SeeSection 10220.7 for the number of years of target financial statements to bepresented when one of the entities is an EGC.SolicitedShareholdersAcquirer onlyConsiderationCash onlyFinancial StatementsFinancial statements of the target are required. 3 years interims if target is Other Reporting Company. 2 years interims if target is Smaller Reporting Company.A non-reporting target may provide only 2 years interims if itwould otherwise meet the definition of a Smaller ReportingCompany.Financial statements of the acquirer are not required in theproxy statement unless they are material to an informed votingdecision (e.g., acquirer financing is not assured) [Instruction2(a) to Item 14 of Schedule 14A], since shareholders arepresumed to have access to information about their company.This presumption is based on the acquirer being current with its1934 Act reports. If otherwise, consult with CF-OCA.Pro forma information is required if it is material to a votingdecision.Back to Table of Contents20
SolicitedShareholdersAcquirer onlyConsiderationFinancial StatementsExemptsecurities onlyor acombination ofexemptsecurities andcashFinancial statements of the target are required. 3 years interims if target is Other Reporting Company. 2 years interims if target is Smaller Reporting Company.A non-reporting target may provide only 2 years interims if itwould otherwise meet the definition of a Smaller ReportingCompany.Financial statements of the acquirer are not required in theproxy statement unless they are material to an informed votingdecision [Instruction 3 to Item 14 of Schedule 14A], sincesecurity holders are presumed to have access to informationabout their company. This presumption is based on the acquirerbeing current wi
Sections of the Financial Reporting Manual have been updated as of July 1, 2019. These sections have been marked with the date tag, “Last updated: 7/1/2019,” to identify the changes. Previous updates are marked using the same convention and represent the last revision to that section.
