New SEC Interpretive Guidance Addresses Tax Reform
In response to the passing of the Tax Cuts and Jobs Act, the Securities and Exchange Commission (“SEC”) has released interpretive guidance to help public companies and auditors adapt to the tax changes and comply with accounting for income taxes. The first guidance is in the form of Staff Accounting Bulletin (“SAB”) No. 118 (Topic 5.EE, Income Tax Accounting Implications of the Tax Cuts and Jobs Act). Under SAB No. 118, companies preparing their 2017 fourth-quarter and end-of-year financial statements and regulatory filings will be allowed to provide what the SEC calls “reasonable estimates” and “provisional amounts” for tax-related line items.. Read More.
Topics: Compliance and Disclosure Interpretations "C&DIs", FASB, Financial Accounting Standards Board "FASB", Income Taxes (Topic 740), Securities and Exchange Commission "SEC", Staff Accounting Bulletin "SAB", Tax Cuts and Jobs Act, Tax Reform
Non-GAAP Guidance Updated by Corp Fin Staff
Staff members of the Securities and Exchange Commission’s Division of Corporation Finance (“Corp Fin”) have revised the Compliance and Disclosure Interpretation, Non-GAAP Financial Measures . The update includes guidance concerning business combination transactions and adds the following two questions: Are financial measures included in forecasts provided to a financial advisor and used in connection with a business combination transaction non-GAAP financial measures? Does the exemption from Regulation G and Item 10(e) of Regulation S-K for non-GAAP financial measures disclosed in communications relating to a business combination transaction extend to the same non-GAAP financial measures disclosed in registration statements, proxy statements and tender offer statements? The Compliance and. Read More.
SEC Chief Accountant Credits Interpretive Guidance for Curbed Misuse of Non-GAAP Measures
Securities and Exchange Commission (“SEC”) Chief Accountant Wesley Bricker is crediting the reduced misuse of non-GAAP measures to the Compliance and Disclosure Interpretations (“C&Dis”) issued in May 2016. Bricker said the interpretive guidance for Regulation G, regulation covering non-GAAP financial information, has helped companies become better disciplined and disclose to investors the use of non-GAAP measurements. Bricker spoke on the C&DIs in October at the National Association of Corporate Directors’ Global Board Leader’s Summit. He remarked that since the C&DIs were issued, public companies have quit highlighting non-GAAP measures more predominately than their audited results. Companies have also established policies. Read More.
SEC’s Corp Fin Updates Compliance and Disclosure Interpretations
Staff members of the Securities and Exchange Commission’s (“SEC”) Division of Corporation Finance (“Corp Fin”) recently updated two Compliance and Disclosure Interpretations (“C&DIs”): Fixing America’s Surface Transportation (FAST) Act (Updated Question 1) ; and Securities Act Forms (New Questions 101.04 and 101.05) . Featuring the staff’s interpretations concerning SEC forms, rules and regulations, both updates relate to financial information requirements for emerging growth companies.
SEC’s Corp Fin Revises Crowdfunding Guidance
The Securities and Exchange Commission’s (“SEC”) Division of Corporation Finance (“Corp Fin”) has revised its Compliance and Disclosure Interpretation, Crowdfunding (new Questions 201.02 and 202.01). The update includes new guidance on related party transaction disclosures and calculating the holders of record for determining eligibility to end the responsibility to file ongoing reports.
New C&DIs Address Pay Ratio Disclosure Rule
Clarifying guidance for pay ratio disclosures, the Securities and Exchange Commission’s Division of Corporate Finance has updated its Compliance and Disclosure Interpretations (“C&DI”): Regulation S-K. The new C&DIs address Release No. 33-9877, Pay Ratio Disclosure, which calls for public companies to disclose the ratio comparing the chief executive officer’s salary with the median pay of a company’s employees. Questions answered in the C&DIs concern the calculation of the median employee compensation, as well as how companies should handle furloughed employees and independent contractors. Public companies will be required to comply with the new pay ratio disclosure requirements in 2018. More. Read More.