1365.1 Comparable Year Information

Transition reports must include prior year information comparable to the transition period. Comparable year information may be unaudited and may be provided on a condensed basis and in the footnotes to financial statements instead of separate statements. [FRR 35] All information responsive to the textual items of the reporting form (e.g., S-K 101, 103, and 303 for Form 10-K) must be provided in the transition report. [FRR 35]

1365.2 Reg S-X Financial Statement Requirements

A transition report filed on Form 10-K must comply with the financial statement requirements of Regulation S-X, including audited statements of comprehensive income, cash flows, and stockholders’ equity for each of the three most recent fiscal years (two most recent fiscal years for Smaller Reporting Companies) and audited balance sheets as of the end of each of the two most recent fiscal years. As provided under S-X 3-06, a transition period of nine to twelve months will satisfy the requirement for one fiscal year. For example, a company with a March 31 year-end decides on January 2, 2023 to change its year-end to December 31, 2022. The company must file a transition report on Form 10-K that includes audited statements of comprehensive income, cash flows, and stockholders' equity for the nine-month transition period ended December 31, 2022 and for each of the two years ended March 31, 2022, as well as audited balance sheets as of March 31, 2022 and December 31, 2022.

In contrast, a company with a June 30 year-end decides on January 2, 2023 to change its year-end to December 31, 2022. The company must file a transition report on Form 10-K that includes audited statements of comprehensive income, cash flows, and stockholders’ equity for the six-month transition period ended December 31, 2022, and for each of the three years ended June 30, 2022. The company must also file audited balance sheets as of December 31, 2022, June 30, 2022 and June 30, 2021.

1365.3 Maximum Audited Reporting Period

No audited reporting period, under any circumstances, may exceed 12 months for domestic issuers.

1365.4 Securities Act Registration Statement

Even though an issuer complies with Exchange Act requirements following an election to change the fiscal year, Securities Act form provisions may require it to provide more current audited financial statements in a Securities Act registration statement. In other words, the requirement to file audited transition-period financial statements may be accelerated when a Securities Act registration statement is filed, with the requirement based on the former fiscal year-end. For example, a company with a September 30 year-end decides on January 2, 2023 to change its year-end to December 31, 2022, and files a transition report on Form 10-Q containing unaudited financial statements for the transition period from October 1, 2022 to December 31, 2022. Under the Exchange Act, audited transition-period financial statements would not need to be filed until the company files its December 31, 2023 Form 10-K. However, a registration statement declared effective after November 14, 2023 (based on the 45-day provision under S-X 3-01) must contain those audited transition-period financial statements.

1365.5 Business Combinations and Change in Fiscal Year

A business combination accounted for as a reverse acquisition may result effectively in a change in fiscal year. See Topic 12.

1365.6 Recasting Prior Period Financial Statements

An issuer is permitted, but not required, to recast its prior period financial statements in subsequent annual reports on Form 10-K or Form 20-F to conform with the issuer's newly adopted fiscal year. [FRR 35, n84]

1365.7 Change To or From 52-53 Week Fiscal Year

A change from a fiscal year ending as of the last day of the month to a 52-53 week fiscal year commencing within seven days of the month end (or vice-versa) is not deemed a change in fiscal year-end if the new fiscal year commences with the end of the old fiscal year. A transition report would not be required. [FRR 35, n26] (Last updated: 9/30/2010)