Add to favorites
The accounting for business combinations and the related disclosures are a consistent area of focus for the SEC staff, with frequent comments related to:
  • why the registrant omitted the disclosures required by ASC 805, such as amounts of post-acquisition revenues and earnings and supplemental pro forma financial information; and
  • compliance with the Regulation S-X Article 11 pro forma financial information and Regulation S-X Article 3-05 financial statements of businesses acquired or to be acquired requirements for significant business combinations disclosed on Form 8-K and in certain registration statements.
Comment Examples
Guidance references
  • Please expand to disclose the amount of net sales and income since the acquisition date included in your statements of income. Refer to ASC 805-10-50-2h(1). Please disclose the nature and amount of any material, nonrecurring pro forma adjustments directly attributable to the acquisition included in the pro forma net sales and income amounts. Refer to ASC 805-10-50-2h(4). Also, please reconcile the costs associated with the closing of the transaction with the amount disclosed in MD&A. Further, we note your narrative disclosures of the assets acquired and liabilities assumed. Given the significance of this acquisition, please consider providing a tabular reconciliation of the preliminary purchase price allocation and consideration paid using the guidance of ASC 805-20-50-1(c) and ASC 805-10-55-41.
  • Please revise future filings to more clearly disclose the information required by ASC 805-30-50-1 for each of your business combinations. Refer to ASC 805-10-55-41 for example illustrative disclosure.
  • We note your company purchased all the outstanding stocks for an acquired business. Please provide us with an analysis that you are not required to file Rule 3-05 financial statements and pro forma financial information under Article 11 of Regulation S-X.
  • We note that you filed a Form 8-K to report the Agreement and Plan of Merger for an acquired business. Please tell us how you determined that you complied with the reporting requirements of Items 2.01 and 9.01 of Form 8-K.

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.

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