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3520 Presentation Requirements
us SEC - Financial Reporting Manual
3520.1 All projections and forecasts must comply with the guidelines for projections in S-K 10. S-K 10 requires that management have a reasonable basis for the assumptions underlying their prospective financial statements. Similarly, the AICPA's guide, Prospective Financial Information, requires these assumptions to be reasonable and suitably supported. The level of support should be persuasive. [See section 6.32] Support for assumptions may include market surveys, general economic indicators, trends and patterns developed from the entity's operating history (e.g., historical sales trends), internal data and analyses (e.g., obligations under union contracts for labor rates), etc. An absence of adequate support may preclude a registrant's ability to include prospective financial statements in the filing. Additionally, a company with a limited operating history may not have a reasonable basis to present a financial forecast beyond one year.
3520.2 Forecasts presented in lieu of pro forma financial statements must be presented in accordance with AICPA guidelines and the following guidance:
a. Forecasts should cover a period of at least 12 months from the later of
1. the latest historical balance sheet in the filing, or
2. the date of the event.
b. Forecasts should include the same degree of detail as that required in pro forma data and should clearly set forth any assumptions used.
c. Historical information of the registrant and business to be acquired (if applicable) should be presented for a recent 12 month period in parallel columns with the forecast.
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