Add to favorites
At a glance

The SEC has amended its disclosure requirements applicable to acquisitions and dispositions of businesses, including real estate operations and investment companies.
The changes include:
  • updating the tests used to determine significance and expanding the use of pro forma financial information when measuring significance;
  • conforming the significance threshold and tests for a disposed business to those used for an acquired business;
  • permitting abbreviated financial statements for certain acquisitions of a component of an entity;
  • revising the pro forma financial information requirements;
  • reducing the maximum number of years for which financial statements under Regulation S-X Rule 3-05 are required to two years;
  • modifying the disclosure requirements relating to the aggregate effect of acquisitions for which financial statements are not (or not yet) required;
  • aligning many of the provisions of Rule 3-14 relating to acquisitions of real estate operations with those under Rule 3-05 relating to acquisitions of other businesses; and
  • providing tailored financial reporting requirements for fund acquisitions by registered investment companies and business development companies.
The amendments are intended to improve the financial information about acquired or disposed businesses provided to investors, facilitate more timely access to capital, and reduce the complexity and costs to prepare the disclosures.

The SEC’s principal financial statement and pro forma disclosure requirements applicable to acquired and to be acquired businesses are generally set forth in Regulation S-X Rule 3-05 (relating to businesses other than real estate operations), and Rule 3-14 (relating to real estate operations).
The SEC’s pro forma disclosure requirements relating to businesses acquired and to be acquired as well as completed or probable dispositions of a significant portion of a business are contained in Rules 11-01 and 11-02.
Each of these rules leverages the SEC’s definition of a significant subsidiary in Rule 1-02(w) for purposes of evaluating the corresponding disclosure requirements.
1Amended Rules 8-04, 8-05, and 8-06 provide corresponding guidance for Smaller Reporting Companies.

Welcome to Viewpoint, the new platform that replaces Inform. Once you have viewed this piece of content, to ensure you can access the content most relevant to you, please confirm your territory.

Your session has expired

Please use the button below to sign in again.
If this problem persists please contact support.

signin option menu option suggested option contentmouse option displaycontent option contentpage option relatedlink option prevandafter option trending option searchicon option search option feedback option end slide