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6510 Item 17(c) of Form 20-F - Basic Requirements
us SEC - Financial Reporting Manual
6510.1 A discussion of material variations in accounting principles, practices and methods used in preparing the financial statements between home-country GAAP and U.S. GAAP
6510.2 A quantified description of balance sheet differences under home-country GAAP in comparison to U.S. GAAP. Most companies elect to present this information in the form of a reconciliation of shareholders' equity, but they may also provide restated balances of individual balance sheet line items, or describe, in numerical terms, how balance sheet line items would specifically change under U.S. GAAP.
NOTE: The reconciliation of shareholders' equity should be in sufficient detail to allow an investor to determine the differences between a balance sheet prepared using home-country GAAP and one prepared using U.S. GAAP.
6510.3 Common deficiencies include:
a. Recording reconciling items net of taxes.
| All reconciling items should be presented gross with a separate adjustment for taxes.
|
b. Presenting adjustments that impact several balance sheet captions as one reconciling item.
| Disclose the impact on each caption for adjustments that impact several captions, such as purchase accounting.
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c. Presenting different items that impact the same caption as one adjustment.
| Disclose the impact for each difference, even if it impacts the same caption.
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d. Not reflecting adjustments at the subsidiary level.
| Each GAAP adjustment should be made at the appropriate subsidiary level to determine the impact on items such as minority interest, taxes and the currency translation adjustment.
|
e. Recording adjustments for items such as property & equipment or intangible assets net of depreciation and amortization expenses.
| These adjustments should be presented gross with separate disclosure of the amounts of accumulated depreciation and amortization.
|
NOTE: Registrants should consider preparing supplemental statements of changes in shareholders' equity using amounts determined under U.S. GAAP to confirm that the reconciliation balances and that it provides appropriate disclosure on changes in the equity accounts on a U.S. GAAP basis. Many registrants elect to include these statements, prepared using U.S. GAAP amounts, as part of their U.S. GAAP reconciliation.
6510.4 A reconciliation of net income from home-country GAAP to U.S. GAAP that quantifies and describes each significant difference.
6510.5 Disclosure of basic and diluted EPS calculated in accordance with U.S. GAAP, if materially different from home-country GAAP. (Last updated: 9/30/2011)
6510.6 A cash flow statement prepared under U.S. GAAP or IAS 7, or a reconciliation of a cash flow statement or statement of changes in financial position that quantifies the material differences in the statement presented as compared to U.S. GAAP. Some of the more common deficiencies in this disclosure include:
a. Failure to identify noncash investing and financing activities;
b. Presentation of items on a net rather than gross basis;
c. Inadequate discussion of the differences in the definitions of "cash" and "cash equivalents"; and
d. Differences in classification.
6510.7 Issuers are encouraged to prepare a supplemental statement of cash flows prepared in accordance with U.S. GAAP to confirm the adequacy of the disclosure of the reconciling items.
6510.8 Information required by supplemental schedule may be presented in accordance with either home-country GAAP or U.S. GAAP. A reconciliation from the home-country GAAP to U.S. GAAP is not required.
6510.9 S-X Article 11 pro forma financial statements either should be prepared on a U.S. GAAP basis or be accompanied by reconciliations to U.S. GAAP prepared in a manner consistent with Item 17. Reconciliations of pro forma information to U.S. GAAP are required even if the historical financial statements of the acquired business are not required to be reconciled. See Section 6220.8 for guidance concerning age of pro forma information. A method consistent with ASC 830 should be used to translate currencies.
6510.10 Disclosure of the accounting method used in the reconciliation to U.S. GAAP for stock-based compensation given to employees and to non-employees. Other than this information, non-issuer financial statements under Item 17 are not required to provide the disclosures set forth in ASC 718. (Last updated: 9/30/2011)
6510.11 [Reserved]
(Last updated: 6/30/2011)
6510.12 [Reserved]
(Last updated: 10/20/2014)
6510.13 Certain GAAPs do not require the restatement of previously issued financial statements upon discovery of an error that relates to prior periods. For example, some GAAPs permit or require cumulative adjustment in the current period statement of comprehensive income, which would ordinarily cause comparative periods to continue to be materially misstated. That treatment would not be acceptable in SEC filings. (Last updated: 12/31/2010)
This is a work of the U.S. Government
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