Search within this section
Select a section below and enter your search term, or to search all click Financial statement presentation
Favorited Content
5.15 Considerations for private companies
Publication date: 31 May 2022
us Financial statement presentation guide
SEC guidance includes a number of specific requirements related to the presentation and disclosure of stockholders’ equity for public reporting entities that are not required for private companies. However, the guidance in ASR 268 requiring that redeemable equity instruments be classified outside of permanent equity is strongly encouraged for all reporting entities. Refer to FSP 5.6.3.1 for additional guidance on mezzanine classification.
In addition, ASC 505-10-50-11 requires that all reporting entities disclose the amount of redemption requirements for all issues of stock that are redeemable at fixed or determinable prices on fixed or determinable dates in each of the five years following the date of the latest balance sheet presented. In contrast, S-X 5-02 requires this disclosure for all redeemable preferred stock issued by SEC registrants.
The following items discussed in this chapter are incremental requirements for SEC registrants that are not required for private companies.
- S-X 3-04 requires inclusion of dividends per share in the statement of changes in stockholders’ equity (or in the footnotes if there is not a separate statement).
- S-X 4-07 requires that any discount on shares (or any unamortized discount) be shown separately as a deduction from the related shares’ account.
- While ASC 505-30-50-2 requires disclosure of restrictions on retained earnings related to repurchase of treasury shares, S-X 4-08 goes further. It requires disclosure of all restrictions upon an involuntary liquidation that results from a preference that exceeds the par or stated value of the related shares.
ASC 505-10-45-3 requires presentation of appropriations of retained earnings for all entities, and ASC 505-10-50-4 requires disclosure of the involuntary preference in liquidation.
- S-X 5-02 requires disclosure on the face of the balance sheet of the following for each issue of common and preferred stock, including redeemable preferred stock:
- Title
- Carrying amount
- Redemption amount
- Dollar amount of any shares subscribed but unissued, and the deduction of subscriptions receivable
- The number of shares authorized, issued, or outstanding for each issue (either on the face of the balance sheet or in the footnotes)
There is a general requirement in ASC 505-10-50-3 to disclose the “pertinent rights and privileges” of all classes of securities, so the above is likely to be required under that guidance.
- SAB Topic 4.C requires that a capital structure change due to a stock dividend, stock split, or reverse split that occurs after the date of the latest reported balance sheet, but before the release (issuance) of the financial statements or the effective date of the registration statement, whichever is later, be given retroactive effect in the balance sheet.
PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
Link copied
