Items 8.A.1 and 8.A.2 of Form 20-F require that documents contain audited financial statements of the registrant/issuer covering the latest three financial years. Financial statements for each year in the three year period should be comprised of balance sheets as of the end of each year and statements of comprehensive income (either in a single continuous financial statement or in two separate but consecutive financial statements; or a statement of net income if there was no other comprehensive income), stockholders equity, and of cash flows, for each of the three most recent years. See SEC FRM 6210.1.

There are exceptions to the three year financial statement requirements related to the following:

Item 8.A of Form 20-F governs the timeliness of financial statements for FPIs. Item 8.A.4 of Form 20-F requires that the last year of audited financial statements may not be older than 15 months at the time of the offering or listing, except in the case of the company’s IPO. In a FPI’s IPO, the audited financial statements must also be of a date not older than 12 months at the time the registration statement is filed. However, the 12-month requirement applies only where the registrant is not public in any jurisdiction. In such cases, the registrant may comply with the 15-month requirement if the registrant is able to represent adequately that compliance with the 12-month requirement is not required in any other jurisdiction and it is impracticable or involves undue hardship. (SEC FRM 6220.3). Instruction 1 to Item 8.A.4 clarifies that the 15-month requirement is based on the effective date of the document.

If the registration statement is filed more than nine months after the end of last audited year then it should contain interim financial statements, which may be unaudited, covering at least the first six months of the financial year. See SEC FRM 6220.1.

The table below summarizes the timeliness requirements described above. This summary table does not reflect financial statement periods that might be omitted in a draft registration statement prepared by an EGC (SEC 2170) or in a nonpublic filing under the SEC staff’s expanded nonpublic review process.

Notes:

No. Instruction 1 to Item 8.A.5 to Form 20-F provides guidance that interim financial information is not required in an annual report on Form 20-F.

If the company provides a full set of interim financial statements under (i) U.S. GAAP (i.e., includes all of the condensed primary statements and all footnotes required by ASC 270-10-50 and S-X Article 10), (ii) IFRS-IASB (e.g., consistent with IAS 34), or (iii) another local GAAP reconciled to U.S. GAAP for a more current period than otherwise required to meet the timeliness requirements under Item 8, the SEC staff would expect that prior year annual financial statements be revised when the more current interim financial information reflects events that require retrospective application, such as reporting a discontinued operation, a change in reportable segments, or a change in accounting principle for which retrospective application is either required or elected (assuming that the effects of the retrospective application are material to the financial statements). See SEC FRM 13100.  See Topic III in the Highlights of the May 2021 meeting of the CAQ International Practices Task Force for guidance if the more current published financial information is not included in the same document as the audited financial statements.

When a material retrospective adjustment to provisional amounts in a purchase price allocation is required (e.g., under IFRS 3 for an IFRS-IASB filer) and the adjustment has not yet been reflected in more current financial statements, the registrant must also provide revised financial statements reflecting that material retrospective adjustment prior to effectiveness of a registration statement (other than on Form S-8). See Topic II.E in the Highlights of the November 2009 meeting of the CAQ International Practices Task Force.

S-X 3-05 (SEC 4550), S-X 3-14 (SEC 4555) and S-X Article 11 (SEC 4560) requirements do not apply to an annual report on Form 20-F.

S-X 3-05, S-X 3-14 and S-X Article 11 requirements apply to a registration statement on Form 20-F.

No. See Topic II.D in the Highlights of the November 2015 meeting of the CAQ International Practices Task Force for a discussion of interim financial statements prepared in accordance with U.S. GAAP and IFRS-IASB. See Topic II.D in the Highlights of the May 2016 meeting of the CAQ International Practices Task Force for interim financial statements prepared in accordance with local GAAP.

The SEC staff has previously indicated that registrants are not required to include guarantor financial information in more current information provided to meet Item 8.A.5 requirements (but not required to meet 9 month timeliness requirements), regardless of whether such information is provided on an IFRS-IASB or a U.S. GAAP basis. See Topic III.C.2 in the Highlights of the May 2015 meeting of the CAQ International Practices Task Force.

If applicable, S-X 13-01 guarantor financial information would be required in connection with those financial statements provided to meet timeliness. See Topic VI in the Highlights of the November 2020 meeting of the CAQ International Practices Task Force.

Yes. Article 12 schedules that are applicable to foreign registrants consist of schedules designated by S-X 12-04, S-X 12-09, S-X 12-15, S-X 12-16, S-X 12-17, S-X 12-18, S-X 12-28, and S-X 12-29. See SEC FRM 6320.6.

The financial statement schedules:

See SEC 8100.403 for applicability to IFRS-IASB filers.

See SEC 4520.24.

If the S-X 3-09 financial statements would otherwise be due before the due date of the registrant’s annual report on Form 20-F, then the S-X 3-09 financial statements need not be filed prior to the due date of the Annual Report Form 20-F. See SEC FRM 2405.9.

The 15 calendar day extension provided for the registrant to file its annual report on Form 20-F is not applicable to S-X 3-09 financial statements to be filed by amendment to a Form 20-F. See Note to SEC FRM 2405.9.

S-X 3-09 financial statements are required to be updated on a more current basis for a registration statement as compared to the requirements for an annual report on Form 20-F. If the investee is a foreign business, S-X 3-09 financial statements may not be older than 15 months. This is the same timeliness requirement for a registrant that is a FPI. If the investee is not a foreign business, S-X 3-09 financial statements must be updated within the following number of days after the investee’s fiscal year end: 60 days if the investee is a large accelerated filer; 75 days if the investee is an accelerated filer; or 90 days for all other investees. See SEC 4520.24 and SEC FRM 2405.11.

See SEC 4400.906.

If financial statements of a foreign business prepared in accordance with U.S. GAAP are provided, only two years are needed to satisfy the S-X 3-09 requirements for the first filing of those financial statements under S-X 3-09. This is based on the premise that the S-X 3-09 financial statements of the foreign business do not have to be provided for more periods than would be required of the entity if it were filing a first-time registration statement.

If the S-X 3-09 financial statements of a foreign business have been provided in prior years on an IFRS-IASB basis, and the foreign business changes its GAAP to U.S. GAAP, then the SEC staff has indicated that U.S. GAAP financial statements would be needed for three years because they do not constitute the first-time filing of S-X 3-09 financial statements.

See Topic III.D in the Highlights of the November 2016 meeting of the CAQ International Practices Task Force.

See SEC 4520.26 and SEC FRM 6410.

The SEC staff indicated that IFRS SMEs is an acceptable basis of accounting for financial statements of a foreign business filed pursuant to the requirements of S-X 3-09 and S-X 3-05. However, such financial statements are subject to the same reconciliation requirements as any other local GAAP.  See SEC FRM 6410.6d. See Topic II.D in the Highlights of the May 2010 meeting of the CAQ International Practices Task Force.

Generally, no. IFRS-IASB filers are required to comply with the IFRS-IASB requirements for financial statement form and content and are not subject to S-X Articles 4, 5, 6, 7, 9, and 10 that relate to specific presentation and disclosure provisions under Regulation S-X. See SEC FRM 6320.6.

However, FPIs must comply with all other applicable S-X requirements, including, but not limited to, the applicable Article 12 schedule requirements and the Article 3 requirements of financial statements of other entities. See SEC 8100.305 and SEC FRM 6320.6.

An issuer that first-time adopts IFRS-IASB may file in applicable filings only two years of statements of income, changes in shareholders' equity and cash flows prepared in accordance with IFRS-IASB, with appropriate related disclosures, if it satisfies the conditions set forth in General Instruction G. As a reminder, IFRS 1 requires an entity's first IFRS financial statements to include at least three statements of financial position. See SEC FRM 6340.1. The issuer must adopt IFRS-IASB for the first-time by an explicit and unreserved statement of compliance with IFRS as issued by the IASB.

However, an issuer that has published audited financial statements prepared in accordance with IFRS-IASB for each of the latest three financial years is required to include all three years of such audited IFRS-IASB financial statements in its SEC filings (see Instruction 4 to General Instruction G of Form 20-F), unless otherwise permitted to exclude the earliest year such as under separate accommodations available to Emerging Growth Companies.

Yes. The accommodation available for first time adoption of IFRS-IASB and the guidance in Instruction G of Form 20-F also applies to the financial statements of a foreign business that are required under S-X 3-05, S-X 3-09 and S-X 3-14. See SEC FRM 6340.2.

General Instruction G provides that an issuer may rely on its first-time application provisions if the issuer adopts IFRS for the first time by an explicit and unreserved statement of compliance with IFRS-IASB. This Instruction G provision was consistent with the "first-time adopter" definition provided in IFRS 1 in existence at the time of the final rule. Subsequent amendments to IFRS 1 allow an entity that has applied IFRS-IASB in a previous reporting period, but whose most recent annual financial statements were not prepared in accordance with IFRS-IASB, to re-adopt IFRS-IASB by choosing to either (i) re-apply IFRS 1, even if the entity applied IFRS 1 in a previous reporting period, or (ii) apply IFRS-IASB retrospectively in accordance with IAS 8, Accounting policies, changes in accounting estimates and errors (i.e., as if it had never stopped applying IFRS-IASB), to resume reporting under IFRS-IASB. An application of General Instruction G to meet SEC filing requirements could result in new registrants and foreign businesses having to select a much earlier date of transition to IFRS-IASB compared to what is permitted by the subsequently amended IFRS 1. The SEC staff has indicated that it is generally receptive to permitting the application of the accommodation provided in General Instruction G where an entity qualifies as a repeat first-time adopter based upon the amended “first-time adopter” definition in IFRS 1 and elects to re-apply the transition provisions of IFRS 1 rather than apply IFRS-IASB retrospectively. The ultimate determination will depend on the specific facts and circumstances. Companies that wish to apply the accommodation in General Instruction G under these circumstances should consult with the SEC staff prior to filing.

See Topic II.A in the Highlights of the November 2012 meeting of the CAQ International Practices Task Force.

An issuer that is changing to IFRS-IASB, but that has not yet prepared its annual IFRS-IASB financial statements reflecting its first-time adoption, may have annual financial statements prepared under its previous GAAP and interim financial statements prepared under IFRS-IASB. Given that the most recent annual and interim periods may therefore not be comparable, financial statements that are required to satisfy the interim financial statement timeliness requirements in a registration statement may follow one of the three financial statement options described in General Instruction G.(f)(2)(B) of Form 20-F. See SEC FRM 6340.4.

A registrant following the options in General Instruction G.(f)(2)(B)(i) or (iii) is required to include, in its audited financial statements for the years prepared under its previous GAAP, a reconciliation to U.S. GAAP for such years. See Q&A 16 to Frequently Asked Questions included in Appendix A in the Highlights of the March 2008 meeting of the CAQ International Practices Task Force for clarification of the reconciliation requirement for the option under General Instruction G.(f)(2)(B)(iii).

An issuer that is unable to provide information that complies with one of the three options in General Instruction G.(f)(2)(B) but has available comparable financial information should contact the Office of International Corporate Finance in the Division of Corporation Finance, in writing and well in advance of any filing deadlines, to discuss its interim period financial information. See Instruction to General Instruction G.(f)(B).

General Instruction G.(f)(2)(A) is applicable for any financial information for any interim or annual financial period that the issuer publishes that is prepared with reference to IFRS-IASB. It provides that Instruction 3 to Item 8.A.5 shall not apply to published financial information prepared with reference to IFRS-IASB. Accordingly, for more current IFRS-IASB financial information that is published, but is not required to meet timeliness requirements, there is no need to describe or quantify the differences in accounting principles, practices and methods that vary materially with U.S. GAAP.

There is likewise no need to describe or quantify differences with U.S. GAAP for interim financial information that is provided to meet timeliness requirements when such information is prepared under IFRS-IASB and the issuer's audited annual financial statements are on such basis. This results from the application of the guidance in Item 17(c) of Form 20-F.

See Topic II.A in the Highlights of the May 2011 meeting of the CAQ International Practices Task Force and SEC FRM 6404.4 and 6340.5.

Yes. An issuer may elect to include, refer to, or incorporate by reference, financial information prepared in accordance with its previous GAAP. See guidance in General Instruction G.

Yes. Instruction 3 to Item 8, Financial Information requires that the reconciliation from a previous GAAP to IFRS-IASB, required by IFRS 1, be presented in the notes to the IFRS-IASB financial statements in a form and level of information sufficient to explain all material adjustments to the balance sheet and income statement, and, if presented under previous GAAP, to the cash flow statement. Additionally, the IFRS-IASB footnotes should disclose each exception used that is permitted or required by IFRS 1, including the items or class of items to which the exception was applied and a description of what accounting principle was used and how it was applied.

The SEC staff requires that if a FPI that previously used U.S. GAAP in its SEC filings concludes that a local GAAP is its previous GAAP for transitioning to IFRS-IASB for SEC reporting purposes, then additional disclosure would be required under Instruction 3 to Item 8 of Form 20-F to provide U.S. investors with information to bridge from the previously filed U.S. GAAP financial statements to IFRS-IASB.

Similarly, bridging information from U.S. GAAP to IFRS-IASB would be required in circumstances in which an issuer begins to file IFRS-IASB financial statements with the SEC that was not a first-time adopter of IFRS-IASB under IFRS 1 (e.g., previously prepared IFRS-IASB financial statements but filed U.S. GAAP financial statements historically with the SEC).

Alternative methods of disclosure are discussed below and such additional disclosure is required to be audited either in the footnotes to the financial statements or in a separate financial statement schedule.

Alternative 1: An analysis of the differences between U.S. GAAP and IFRS-IASB in a format consistent with the form and content provisions of Item 17 for the same periods and dates for which the IFRS 1 reconciliations are required. This analysis would disclose differences between US GAAP and IFRS-IASB for equity as of the beginning and end of the most recent comparative period to the year of adoption and of profit or loss for the most recent comparative year then ended. A description of differences between U.S. GAAP and IFRS-IASB as they relate to the statement of cash flows would not be necessary, since, under its accommodation to FPIs, the SEC accepts without reconciliation to U.S. GAAP a cash flow statement prepared in accordance with IAS 7, Cash Flow Statements, as amended.

Alternative 2: "Two-step reconciliations" of equity as of the beginning and end of the most recent comparative period to year of adoption and of profit or loss for the most recent comparative year then ended. The two-step reconciliations would present: (Step 1) a quantitative analysis of the differences between U.S. GAAP and Previous GAAP, consistent with an Item 17 format for the same periods and dates for which IFRS 1 reconciliations are required; and (Step 2) the IFRS 1 reconciliation from Previous GAAP to IFRS-IASB. In addition to this reconciliation, an explanation of the material differences between the cash flow statement under US GAAP and the cash flow statement under Previous GAAP for the most recent comparative period to the year of adoption should also be provided.

Although generally the SEC staff would expect to see the analysis in either of the formats above, registrants should reach out to the SEC staff if they consider using an alternative presentation, based on unique or unusual circumstances.

The SEC staff believes that additional disclosure between U.S. GAAP and IFRS-IASB is necessary. Alternative 1 above is the more practicable option of providing disclosure, since there is no relevant previous GAAP information for Alternative 2 reconciliation. The additional disclosure would be provided for equity as of the end of the most recent comparative period in the Form 20-F, and of profit or loss for the two most recent comparative years then ended. However, if the company presents a balance sheet as of the end of the third preceding year in accordance with IFRS-IASB, then the additional disclosure also would be provided for equity as of that date.

See SEC FRM 6345. See Appendix A in the Highlights of the March 2008 meeting of the CAQ International Practices Task Force and Discussion Document A in the Highlights of the November 2008 meeting of the CAQ International Practices Task Force.

Item 16I was added to Form 20-F to implement the disclosure and submission requirements of the Holding Foreign Companies Accountable Act. Item 16I applies only to annual reports on Form 20-F and does not apply to registration statements. See Item 16I for disclosure requirements and see SEC 3130.35 for further discussion.

See SEC 4560.914 for pro forma financial statement considerations related to reverse mergers when the legal acquirer and the accounting acquirer use different bases of accounting.

See Topic II in the Highlights of the November 2019 meeting of the CAQ International Practices Task Force addressing transition to FPI status of a foreign public shell immediately upon its reverse merger with a foreign operating company and basis of accounting reported by the operating company in conjunction with the transaction.

Yes. Information that has previously been filed with the SEC (e.g., such as on a Form 6-K) is permitted to be incorporated by reference in answer, or partial answer, to any item required to be disclosed in an annual report on Form 20-F, subject to the limitations set forth in Exchange Act Rule 12b-23. Issuers using incorporation by reference are required to identify with specificity the information that is being incorporated by reference. See Exchange Act Forms CDI 110.07.

Generally, no. See SEC 2110.908 and Securities Act Rule 411(a).

No. In SEC Release No. 33-10890, Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information, the SEC eliminated the requirement for selected financial data that was previously set forth in Item 3.A of Form 20-F.

See SEC 2110.910 for additional guidance.

Item 3.B of Form 20-F requires a capitalization table prepared on an actual basis as of a date within 60 days of the effectiveness of a registration statement. However, Item 8 of Form 20-F permits the most recent balance sheet (from which a capitalization table is ordinarily derived) to be as much as 9 months old. The SEC staff will not object if a FPI presents its capitalization table on an actual basis as of the same date as the most recent balance sheet required in its registration statement. See SEC FRM 6270. If applicable, capitalization is also shown “as adjusted” to reflect the sale of new securities being issued and the intended application of the net proceeds therefrom. See Instruction 1 and 2 to Item 3.B of Form 20-F.

See Topic VII.C. in the Highlights of the May 2000 meeting of the CAQ International Practices Task Force.

See SEC 3130.31.

See SEC 3130.911.

See SEC 3130.33.

Perhaps.

Item 15(b) of Form 20-F requires inclusion of management’s report on internal control over financial reporting for an issuer that is an accelerated filer or a large accelerated filer, except for EGCs.

Item 15(c) of Form 20-F requires inclusion of the registered public accounting firm's attestation report on the issuer's internal control over financial reporting for an issuer that is an accelerated filer or a large accelerated filer, except for EGCs.

See SEC 3125.4 for guidance related to the requirements to include a management’s report on internal control over financial reporting and an auditor’s attestation report in an annual report on Form 20-F.

The certifying officers are required to indicate in their Section 302 certification whether there was any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting. Although disclosure (related to changes in internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15) under Item 15(d) of Form 20-F is not required until the first Form 20-F filed after the Form 20-F containing the Item 15(b) requirements are applicable, the certifying officers are nevertheless still required to make the paragraph 4(d) certifications. See paragraph 4(d) in the Certifications section included in Item 12 in the Instructions as to Exhibits of Form 20-F.

See SEC 3126 for a brief overview of these two certifications. Item 12 in the Instructions as to Exhibits of Form 20-F includes the exact format of the text of the Section 302 certification that is required separately from each principal executive officer and principal financial officer of the registrant and included as an exhibit to an annual report on Form 20-F. Unlike the Section 302 certifications, the Section 906 certifications are required only in periodic reports that contain financial statements. Therefore, amendments to periodic reports that do not contain financial statements would not require a new Section 906 certification, but would require a new Section 302 certification to be filed with the amendment. In addition, unlike the Section 302 certifications, the Section 906 certifications may take the form of a single statement signed by a company's chief executive and financial officers.

No. Instruction 5 to Item 5 of Form 20-F requires an issuer filing IFRS-IASB financial statements to provide disclosures that satisfy the objective of the item's disclosures in responding to paragraphs of those items that refer to pronouncements of the FASB. If information called for by the non-financial statement requirements of Form 20-F duplicates information contained in the IFRS-IASB financial statements, the company need not duplicate such information but may instead cross reference to the appropriate footnote in the audited financial statements. The applicable IFRS standards that correlate with the related U.S. GAAP pronouncement and the item's objective are not provided in Form 20-F.

Yes. Item 8 of Form 20-F requires a cash flow statement with respect to separate S-X 3-05 and S-X 3-09 financial statements. If the local GAAP does not require inclusion of a cash flow statement, such statement is still required for any financial statements required to be filed with the SEC, even if such financial statements are not required to be reconciled to U.S. GAAP, including when significance is not exceeded at the 30 percent level for significant acquirees and investees. See Topic VII.D in the Highlights of the May 2000 meeting of the CAQ International Practices Task Force. The SEC staff has advised that the cash flow statement has to be presented on an audited basis for the same periods that statements of comprehensive income are required to be presented. A cash flow statement that complies with either (i) ASC 230, (ii) IAS 7, or (iii) local GAAP reconciled to ASC 230 for only the required periods would be acceptable. If such ASC 230 or IAS 7 presentation would not be acceptable under the local GAAP then the audit report may be qualified for such departure from local GAAP and such a departure would be acceptable to the SEC.

Yes. S-X 3-20(a)(1) allows a FPI to state amounts in its primary financial statements in any currency which it deems appropriate. Specific disclosure is required in a note to the financial statements if the currency in which the issuer expects to declare dividends is different from the reporting currency, or there are material exchange restrictions affecting the reporting currency, the currency of the Issuer's domicile, or the currency in which dividends are paid. Changes in the reporting currency require that financial statements of periods presented prior to the change be recast as if the new reporting currency had been used. Additionally, the decision to change and the reason for the change in the reporting currency must be disclosed in a note to the financial statements in the period in which the change occurs.

See SEC FRM 6610 and SEC FRM 6620 for additional guidance.

See S-X 3-20. Although S-X 3-20 allows a FPI to use any reporting currency which it deems appropriate, transactions denominated in a non-hyperinflationary currency are required to be measured and translated pursuant to the guidance in S-X 3-20(d).

S-X 3-20 is silent with respect to how to measure the transactions of operations located in a hyperinflationary environment. See S-X 3-20(d) for a definition of a hyperinflationary environment. Pursuant to Form 20-F requirements, a FPI presenting local GAAP financial statements must follow its local GAAP in measuring such transactions in order for the audit report to be acceptable to the SEC (i.e., no exception is allowed in the audit report related to the primary local GAAP financial statements). Footnote 10 to SEC Release No. 33-7117, Selection of Reporting Currency for Financial Statements of Foreign Private Issuers and Reconciliation to U.S. GAAP for Foreign Private Issuers With Operations in Hyperinflationary Economy (SEC Release 33-7117) indicates that an issuer with a material operation in a hyperinflationary environment would measure the transactions of the operation in the reporting currency pursuant to ASC 830, except that no U.S. GAAP reconciliation to that method will be required in the circumstances discussed in Section III of the SEC Release 33-7117. See Item 17(c)(2)(iv) of Form 20-F. The requirements of Item 17(c)(2)(iv) and Item 18 of Form 20-F are identical.

SEC Release No. 33-7117 allows a FPI to use the U.S. dollar (or other stable reporting currency) as the reporting currency for entities operating in a hyperinflationary environment using ASC 830 for measurement into the reporting currency. However, if this option is elected, the SEC would require the issuer to present its primary financial statements on a U.S. GAAP basis if the local GAAP does not permit the use of ASC 830 for translating primary financial statements from a hyperinflationary currency to a stable currency. Reporting on local GAAP financial statements in which ASC 830 is applied would not be accepted by the SEC if such presentation would result in a local GAAP exception in the auditor's report. Technically, presentation of such primary financial statements using ASC 830 is also not prescribed by ASC 830, which addresses measurement/translation of the results of foreign operations in hyperinflationary environments for inclusion in an issuer's primary financial statements presented in a stable currency, as opposed to translation to primary financial statements of the issuer itself operating in a hyperinflationary environment. However, with the adoption of the SEC Release 33-7117, such ASC 830 presentation is considered to be U.S. GAAP. Accordingly, no exception needs to be made in the audit report on U.S. GAAP financial statements related to this matter.

If the domicile country is hyperinflationary and the registrant's financial statements have not been recast or supplemented with inflation adjusted data, then supplementary information presenting and quantifying the effects of inflation upon its financial condition and results of operations is required to be included.

See SEC FRM 6700 for additional guidance.

See SEC FRM 6620.5.

If a convenience translation is provided then the rate at the most recent balance sheet date should be used unless that rate has changed materially, in which case a more current rate at the most recent date practicable is appropriate. The rate used should be prominently disclosed.

When convenience translation amounts are given, an explanatory note usually contains a statement such as the following:

If a company's local GAAP financial statements are price level adjusted for inflation, all financial information (including the financial statements) should be presented in equivalent purchasing power units of the reporting currency as of the date of the most recent balance sheet information in the filing. A company that incorporates by reference a prior annual report on Form 20-F need not amend the prior filing, but must file restated financial statements in the registration statement or under a cover of a Form 6-K that is incorporated by reference.

If the interim information is included in a registration statement solely to comply with the current information requirement of Item 8 of Form 20-F, and is not presented in or reconciled to U.S. GAAP, we understand that the SEC staff encourages but does not insist that prior periods be restated in units of equivalent purchasing power as of the most recent date. The SEC does expect companies to provide disclosure necessary to prevent the updated data from being misleading in relation to prior period financial information.

If the rate of inflation during the interim period is very low, such that the effect of restatement does not materially affect apparent trends and is clearly immaterial, we understand that the SEC staff has not insisted that prior period financial information be restated. If the information is not restated, the SEC staff would expect disclosure of the rate of inflation and the reason why restatement was not considered to be necessary.

See SEC FRM 6720.

No, not necessarily. Financial statements of an acquired businesses or an equity method investee may be prepared using the same reporting currency as the registrant's primary financial statements or the currency in which the acquiree or investee normally prepares its financial statements.

However, if the currency selected for the separate financial statements of acquirees or investees differs from that of the registrant, pro forma information related to an acquisition (S-X Article 11) and summarized financial data of an equity investee (S-X 4-08(g) for U.S. GAAP filers and IFRS 12 for IFRS filers) included in the footnotes of the registrant are presented using the reporting currency of the registrant.

Yes. References to "GAAP" in the definition of non-GAAP financial measures refer to the principles under which the primary financial statements of the FPI are prepared. See Note in SEC FRM 8140.

FPIs are subject to S-K 10(e) requirements related to the use of non-GAAP financial measures in information “filed” with the SEC (e.g., in Form 20-F and in Securities Act registration statements). A non-GAAP measure that would otherwise be prohibited under S-K 10(e)(1)(ii) is permitted in a filing if the measure is:

The financial measure is required to be presented outside of the financial statements unless the financial measure is required or expressly permitted by the standard setter that is responsible for establishing the GAAP used in such financial statements.

See SEC FRM 8140.

See SEC 6020 for additional guidance on non-GAAP financial measures.

See Non-GAAP Financial Measures CDI 106.01.

Yes. Interim financial statements prepared on a local GAAP basis and filed to meet the timeliness of financial information requirements of Item 8.A.5 of Form 20-F should be reconciled to U.S. GAAP pursuant to the same Item 17 or Item 18 requirements being followed in the audited annual financial statements. All qualitative disclosures relating to U.S. GAAP and Regulation S-X required for such interim local GAAP financial statements would be necessary for an Item 18 reconciliation. For example, the segment disclosures required by U.S. GAAP would be applicable.

There is no requirement in S-X 13-01 for a parent company that prepares its financial statements on a comprehensive basis of accounting other than U.S. GAAP or IFRS-IASB to reconcile such S-X 13-01 information to U.S. GAAP. However, in SEC Release No. 33-10762, Financial Disclosures about Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities it is noted that although there is no reconciliation requirement, S-X 13-01(a)(6) and (7) require the parent company to disclose additional financial information about each guarantor if the information would be material for investors to evaluate the sufficiency of the guarantee, as well as sufficient information so as to make the financial and non-financial information presented not misleading.

Financial statements included in FPI filings with the SEC must comply with either Item 17 or Item 18 of Form 20-F.

The distinction between Item 17 and Item 18 is premised on a classification of the requirements of U.S. GAAP and Regulation S-X into those that specify the methods of measuring the amounts shown on the face of the financial statements and those prescribing disclosures that explain, modify or supplement the accounting measurements.

Item 17 and Item 18 of Form 20-F both require the quantified reconciliation of the "measurement" differences between local and U.S. GAAP and a discussion of such differences.

Disclosures required by U.S. GAAP but not required under a local GAAP need not be furnished pursuant to Item 17.

Item 18 requires an issuer to provide all other qualitative disclosure information called for by U.S. GAAP and S-X not otherwise disclosed in the local GAAP accounts. SAB Topic 1.D provides guidance to clarify the distinction between Item 17 and Item 18.

Compliance with Item 18 of Form 20-F is required for all financial statements of the issuer in all Securities Act registration statements, Exchange Act registration statements on Form 20-F, and annual reports on Form 20-F (see General Instruction E.(c) to Form 20-F). Certain financial statement schedules are also applicable to foreign registrants. See Item 17(a) of Form 20-F. See SEC FRM 6410.2(a). Also see SEC 8100.305.

Yes. Item 17 compliance is permitted for non-issuer financial statements such as those pursuant to S-X 3-05, S-X 3-09 and S-X 3-14, as well as non-issuer target company financial statements included in Form S-4, Form F-4, and proxy statements.

Item 17 is permitted for pro forma information pursuant to S-X Article 11. See SEC FRM 6410.2(a) for circumstances when the reconciliation may reconcile to U.S. GAAP for only the two most recently completed fiscal years and any interim periods required in the registration statement.

The SEC staff has advised that they consider certain disclosures necessary for all financial statements filed with the SEC under both Item 17 and Item 18.

Local GAAP must comprise a "comprehensive body" of accounting principles, and disclosure of the information in Items 17(c)(1) and 17(c)(2) is required. This includes:

Disclosure of the accounting principles being used should include the consolidation principles being applied. The SEC staff has noted instances where majority-owned subsidiaries were not consolidated, yet disclosure for the reasons for non-consolidation was not made. The SEC staff has objected to the use of boilerplate disclosures regarding an enterprise's consolidation policy when majority-owned subsidiaries are appropriately excluded from consolidation. The disclosure should allow an investor to clearly understand why the registrant does not control the subsidiary.

The SEC staff also believes that a comparable level of disclosure should be provided when a registrant appropriately consolidates a less-than majority-owned subsidiary. The SEC staff believes the disclosure in this area is necessary to meet the requirement for an information content that is substantially similar to U.S. GAAP.

Certain differences between local GAAP and U.S. GAAP are not required to be included in the U.S. GAAP reconciliation as described in Item 18 of Form 20-F. These include: (1) the effects of inflation included in the local GAAP financial statements pursuant to a comprehensive basis of accounting for inflation; (2) the effects of translation of financial statements pursuant to local GAAP that translates amounts in financial statements stated in a currency of a hyperinflationary economy into the issuer's reporting currency in accordance with IAS 21 using the historical cost/constant currency approach; and (3) the effects of differences in classification or display that result from using proportionate consolidation for investments in joint ventures pursuant to a local GAAP (however, summarized balance sheet, income statement and cash flow information relating to the joint venture is required).

Where the differences in accounting principles are pervasive and significantly affect the financial statements, the SEC may require the foreign issuer to present a condensed or full set of financial statements under U.S. GAAP. See SEC FRM 6520.2.

Notwithstanding the absence of a requirement for certain disclosures within the body of the financial statements, some matters routinely disclosed pursuant to U.S. GAAP may rise to a level of materiality such that their disclosure is required by Item 5, "Operating and Financial Review and Prospects," of Form 20-F. See SAB Topic 1.D for matters that may warrant discussion under Item 5.

A FPI reporting under local GAAP reconciled to U.S. GAAP must reconcile its S-X Article 11 pro forma financial information to U.S. GAAP. The SEC staff generally has not objected if an issuer, that otherwise would present its pro forma financial information based on local GAAP with a reconciliation to U.S. GAAP, elects to present the pro forma financial information directly in U.S. GAAP. See SEC FRM 6360.2 and SEC FRM 6410.11.

There are some inherent issues in the application of the current rules. For example, a registrant whose annual financial statements comply with IFRS-IASB is required to measure significance on such IFRS basis. If applicable, the financial statements of an acquired or to be acquired foreign business (as defined in S-X 1-02(l)) are required to be provided under S-X 3-05, and such financial statements could be presented on any of the following basis: (a) US GAAP; (b) local GAAP (reconciled to US GAAP or IFRS-IASB if 30 percent threshold is met); or (c) IFRS-IASB, without reconciliation to US GAAP. Financial statements presented under option (a) are not required to be reconciled to IFRS-IASB. Financial statements under option (b) generally are not required to include a reconciliation if the 30 percent threshold of significance is not met, or could be reconciled to US GAAP. However, in each of these situations, reconciliation to IFRS-IASB would need to be done to compute the related significance thresholds in applying such tests. Furthermore, IFRS-IASB information for the acquired or to be acquired business is needed for the registrant to present S-X Article 11 pro forma information.

In some cases, it could be necessary for the acquiree financial statements to include an audited reconciliation to IFRS-IASB to enable management's inclusion of such information in the S-X Article 11 pro forma information.

If the prior interim period is voluntarily provided on a pro forma local GAAP basis other than IFRS-IASB, such pro forma financial information is required to be reconciled to U.S. GAAP.