Regulation S-X and U.S. GAAP must be followed by domestic issuers. Financial statements not prepared in accordance with U.S. GAAP are presumed to be inaccurate or misleading. [S-X 4-01(a)(1)] However, the following situations should be noted:

1410.1 Smaller Reporting Companies

Smaller Reporting Companies may choose to provide disclosures under S-X Article 8 rather than under other S-X Articles applicable to Non-Smaller Reporting Companies. The principal differences are that Article 8 does not have a requirement to file supplemental schedules, does not designate specific financial statement format, does not stipulate quantitative thresholds for many disclosures, and does not have a requirement to file separate financial statements of investees as would be required under S-X 3-09. However, the auditor reporting and independence requirements of S-X Article 2 and the full cost oil and gas disclosures required by S-X 4-10 apply to Smaller Reporting Companies. With regard to pro forma financial information, Smaller Reporting Companies should comply with the requirements of S-X 8-05, but may wish to consider the guidance in S-X Article 11.

1410.2 Annual Report to Shareholders

The annual report does not need to include the separate financial statements of other entities, pro forma data, or schedules required by Articles 3, 8, 11 and 12 of Regulation S-X, or predecessor audit reports. [Rule 14a-3(b)(1)]

1410.3 Royalty Trusts

May report on a different basis pursuant to SAB Topic 12E.

1410.4 Mutual Life Insurance Companies

May present financial statements on statutory basis [S-X 7-02], which cannot be characterized as being in conformity with GAAP. CF-OCA should be consulted on filings containing such financial statements. A mutual insurance company converting to stock form must follow GAAP for stock companies for all periods presented.

1410.5 Emerging Growth Companies

An EGC is not required to comply with new or revised financial accounting standards until a company that is not an issuer (as defined under section 2(a) of the Sarbanes-Oxley Act of 2002) is required to comply with such standards, if such standards apply to companies that are not issuers. An EGC that chooses not to take advantage of the extended transition provision must make such choice at the time the company is first required to file a registration statement, periodic report or other report, and must notify the Commission of such choice. Note that the decision to forego the extended transition period is irrevocable. See Topic 10 for additional information.(Last updated: 6/30/2013)