On May 3, 2019, the US Securities and Exchange Commission (SEC) proposed revisions to financial statement disclosures with respect to business acquisitions and dispositions required by Regulation S-X’s Rule 3-05 (Financial Statements of Businesses Acquired or to be Acquired (Rule 3-05)), Rule 3-14 (Special Instructions for Real Estate Operations to be Acquired (Rule 3-14)), Article

As part of the Disclosure Effectiveness initiative, the Securities and Exchange Commission proposed amendments to address the financial disclosure requirements in connection with acquisitions and dispositions.  The SEC proposed amendments to the requirements in Rules 3-05, 3-14, and Article 11 of Regulation S-X, as well as related rules and forms, for financial statements of businesses

In our latest On point. we discuss the nature and purpose of non-GAAP financial measures and the rules governing the use of such financial measures.  We also examine recent SEC comment letters and discuss areas of concern identified by the Staff.  Last, we look at recent pronouncements that provide guidance on best practices for companies

In recent years, the Staff of the Securities and Exchange Commission (the “SEC”) has been providing comments regarding companies’ presentations of non-GAAP financial measures in public filings.  We surveyed and discussed the non-GAAP comments issued by the Staff to REITs, which can be found here.  In the period since the publication of the survey,

US reporting companies that are planning or have completed a significant acquisition of a business may need to file separate target financial statements and related pro forma financial statements under Rule 3-05 and Article 11 of Regulation S-X.  The specific SEC rules and financial reporting obligations triggered by a significant acquisition can be quite complex

In a recent paper titled “Damage Control: Changes in Disclosure Tone After Financial Misconduct,” authors Rebecca L. Files, Alex Holcomb, Gerald S. Martin, and Paul Mason assess how companies change the tone of their required disclosures in order to mitigate the effect of financial misconduct. In evaluating tone, the study focuses on the

Before the SEC shutdown, the Office of the Investor Advocate published the annual report on its activities during 2018. The report addresses non-GAAP financial measures and key performance indicators. The report notes that some investors find value in non-GAAP financial measures; however, others are troubled by inconsistent and changing disclosures and would like to see

In a recent cease and desist order accompanied by a $100,000 civil penalty, the US Securities and Exchange Commission (SEC) gave a strong reminder of the importance of providing equal or greater prominence to the most directly comparable financial measure calculated and presented in accordance with Generally Accepted Accounting Principles (GAAP) in disclosures containing non-GAAP