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10220 Financial Reporting Accommodations
us SEC - Financial Reporting Manual
10220.1 Number of Years of Registrant Financial Statements to be Presented
a. Initial Public Offering of Common Equity Securities
An EGC is not required to present more than two years of audited financial statements in a Securities Act registration statement for an initial public offering of its common equity securities.
Foreign private issuers that file using IFRS as issued by the IASB may need a third balance sheet in certain circumstances. See Section 10320.
b. Initial Public Offering of Debt Securities
An EGC must present three years of audited financial statements in its initial public offering of debt securities, unless Section 10220.1c applies.
c. Securities Act Registration Statements Filed Subsequent to the Initial Public Offering of Common Equity Securities
An EGC is not required, in subsequent filings, to include audited financial statements for any periods prior to the earliest audited period presented in connection with its initial public offering of common equity securities.
d. Exchange Act Registration Statements
EGC Exchange Act registration statements require the presentation of three years of financial statements unless the company qualifies as a smaller reporting company.
e. Annual Report on Form 10-K or 20-F
For an EGC that is not a smaller reporting company, three years of audited financial statements are required to be included in its Form 10-K or Form 20-F.
f. Omission of Financial Information for Historical Periods
See the Division of Corporation Finance's C&DIs for Securities Act Forms, Question 101.04. Note that Question 101.05 addresses similar matters for non-EGC issuers. (Last updated 8/25/2017)
See the Division of Corporation Finance's C&DIs for Securities Act Forms, Question 101.04. Note that Question 101.05 addresses similar matters for non-EGC issuers. (Last updated 8/25/2017)
10220.2 Selected Financial Data
In the initial registration statement under the Securities Act or the Exchange Act and in subsequent filings, an EGC is not required to present selected financial data in accordance with Item 301 of Regulation S-K for any period prior to the earliest audited period presented in that initial registration statement.
A company that has lost EGC status does not need to present, in subsequently filed registration statements and periodic reports, selected financial data for periods prior to the earliest audited period presented in its initial Securities Act or Exchange Act registration statement.
10220.3 [Reserved].
(Last updated: 10/30/2020)
10220.4 Management Discussion and Analysis (Last updated 3/17/2016)
An EGC may limit its MD&A discussion to cover the periods presented in the financial statements included in its registration statements filed or submitted for its initial public offering.
10220.5 Financial Statements of Entities Other than the Registrant and Pro Forma Financial Information (Last updated: 11/9/2016)
- If the significance tests result in a requirement to present three years of financial statements for entities other than the registrant, such as acquired businesses under Rule 3-05, acquired real estate operations under Rule 3-14 or equity method investees under Rule 3-09, an operating company EGC may present two years of financial statements for these other entities in the registration statement for its initial public offering of common equity securities.
- If an operating company EGC voluntarily presents a third year of its financial statements in its initial public offering of common equity securities, it may limit the financial statements of these other entities to two years instead of three in that registration statement.
- See the Division of Corporation Finance's C&DIs for the FAST Act, Question 2 for guidance regarding the omission of financial statements of other entities. (Last updated 8/25/2017)
- An EGC may be required to file a Form 8-K pursuant to Items 2.01 and 9.01 for the acquisition of a significant business. If the significance tests result in a requirement to present three years of financial statements, an operating company EGC may present two years of financial statements for the acquired business in its Form 8-K during the period subsequent to the EGC's initial public offering of common equity securities, but prior to the earlier of the filing or the filing deadline of its first Form 10-K.
For example, assume a non-SRC operating company that qualifies as an EGC presents two years of its financial statements in the registration statement for its initial public offering of common equity securities. Two years later, it acquires a company that also qualifies as a non-SRC EGC. Assume that post-transaction, based on the application of Section 10120.2, the post-merger company is an EGC. Post-transaction, the Form 8-K must present three years of the accounting acquirer's financial statements, even though the post-merger company is an EGC. The reason is that the Form 8-K is not: (1) a registration statement for an initial public offering of common equity securities or (2) filed subsequent to the EGC's registration statement for an initial public offering of common equity securities, but prior to the earlier of the filing or the filing deadline of its first Form 10-K. However, because the post-merger company is an EGC, it may take advantage of scaled disclosure provisions other than those related to the number of years to present in a filing.
10220.6 Financial Statements of a Target Company in Form S-4
The staff will not object if an operating company EGC presents two years of the target's financial statements and interims in a Form S-4 that constitutes an EGC's initial public offering of common equity securities or in a Form S-4 filed subsequent to the EGC's initial public offering of common equity securities but prior to the earlier of the filing or the filing deadline of its first Form 10-K.
See related discussion in Section 2200.1 to 2200.5 for the periods for which target financial statements need to be presented in a Form S-4 and Sections 2200.6 and 2200.7 for when target financial statements need to be audited in an S-4.
10220.7 Financial Statements of a Target Company in a Proxy Statement (Last updated: 11/9/2016)
To the extent that target financial statements are required in a proxy statement (see Section 1140.3), the staff will not object if two years of the target's annual financial statements and interim financial statements are presented in a proxy statement filed after the legal acquirer's initial public offering of common equity securities but prior to the filing or the filing deadline of the legal acquirer's first Form 10-K only if:
- The legal acquirer is an EGC that is not a shell company, or
- The legal acquirer is a shell company EGC (such as a SPAC EGC) and the target would be an EGC if it were conducting an initial public offering of common equity securities.
This is a work of the U.S. Government
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