(Last updated: 9/30/2009)
Certain events that occur after the end of a fiscal year will require retrospective revision of that year's financial statements (the "pre-event financial statements") if they are reissued after financial statements covering the period during which the event occurred have been filed. Such events include reporting a discontinued operation, a change in reportable segments, or a change in accounting principle for which retrospective application is either required or elected.
13110.1 Reissuance of the pre-event financial statements is required if those financial statements are required to be included or incorporated by reference into a registration or proxy statement (with the exception of Form S-8 as noted below) along with financial statements covering the period during which the event occurred (the "post-event" financial statements).
13110.2 In the case of a registration statement on Form S-3, Item 11(b)(ii) of that form would specifically require retrospective revision of the pre-event audited financial statements that were incorporated by reference to reflect a subsequent change in accounting principle (or consistent with staff practice, discontinued operations and changes in segment presentation) if the Form S-3 also incorporates by reference post-event interim financial statements. If post-event financial statements have not been filed, the registrant would not revise the pre-event financial statements in connection with the Form S-3, however, pro forma financial statements in accordance with Article 11 of Regulation S-X may, in certain circumstances, be required. In contrast, a prospectus supplement used to update a delayed or continuous offering registered on Form S-3 (e.g., a shelf takedown) is not subject to the Item 11(b)(ii) updating requirements. Rather, registrants must update the prospectus in accordance with S-K 512(a) with respect to any fundamental change. It is the responsibility of management to determine what constitutes a fundamental change.
13110.3 If the pre-event financial statements are not reissued in connection with any filing under the Securities Act or Exchange Act, annual information does not need to be retrospectively revised until that information is included in the registrant's next Annual Report on Form 10-K.
13110.4 Retrospectively revised quarterly information is required in Form 10-Qs filed with post-event financial statements.
13110.5 For the information of investors, once post-event financial statements have been filed with the SEC, a registrant may elect (if reissuance is not required) to file under cover of Form 8-K (Item 8.01) audited retrospectively revised financial statements for the pre-event periods.
NOTE to SECTION 13100:
The requirement to revise financial statements for Form S-3 and the exception for Form S-8 noted below are derived from the Division of Corporation Finance's Compliance and Disclosure Interpretations August 14, 2009, Securities Act Forms Q126.40:
After its Form 10-K is filed, a registrant has a change in accounting principles (or changes in segment presentation or discontinued operations), which will cause the financial presentation in its subsequent Form 10-Qs to differ from that in the Form 10-K. In this situation, Item 11(b)(ii) of Form S-3 would require the annual audited financial statements filed in the Form 10-K to be restated to reflect the change in accounting principles (or changes in segment presentation or discontinued operations). Would General Instruction G.2 of Form S-8, which requires that "material changes in the registrant's affairs" be disclosed in the registration statement, also require such restatement?
Not necessarily. Form S-8 does not contain express language similar to Item 11(b)(ii) of Form S-3, requiring the restatement of financial statements to reflect specified events. The fact that financial statements eventually will be retroactively restated does not necessarily mean that there are "material changes in the registrant's affairs," thereby requiring the financial statements to be restated for inclusion, or incorporation by reference, in a Form S-8. In other words, financial statements for which Item 11(b)(ii) of Form S-3 would require restatement may not necessarily need to be restated for incorporation by reference in a Form S-8. The registrant is responsible for determining if there has been a material change and, if so, the related information that is required to be disclosed in a Form S-8. Correspondingly, it is the auditor's responsibility to determine if it will issue a consent to use of its report in a Form S-8 if there has been a change in the financial statements in a subsequent Form 10-Q where the financial statements in the Form 10-K have not been retroactively restated.
13110.6 Form 10-K/A ordinarily should not be used to file retrospectively revised financial statements that reflect a subsequent change in accounting principle, discontinued operations or change in segment presentation. However, the staff will not object if a registrant, in a Form 10-K/A filed to correct a material error, also reflects the retrospective effects of accounting changes (or consistent with staff practice, discontinued operations and changes in segment presentation) that have been reflected in filings with the SEC subsequent to the original Form 10-K. If the Form 10-K/A is incorporated by reference into a registration statement, then the correction of the error and the accounting change would be required to be presented in the Form 10-K/A. In these circumstances, the financial statements in the Form 10-K/A should clearly distinguish the effects of the material error from those of any subsequent accounting change. (Last updated: 9/30/2010)
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