An SEC proposal to "modernize, simplify, and enhance" certain Regulation S-K financial disclosure requirements was published in the Federal Register. Comments must be received by April 28, 2020.
As previously covered, the proposal - which follows the publication of a staff report - is part of a broader initiative to assess and improve the agency's disclosure requirements. The proposal would, among other things:
- eliminate duplicative requirements contained in Item 301 ("Selected Financial Data"), Item 302 ("Supplementary Financial Information") and Item 303(a)(5) ("Tabular Disclosure of Contractual Obligations");
- modernize Management's Discussion and Analysis ("MD&A") disclosures by amending Item 303;
- explicitly state the principal objectives of MD&A under new Item 303(a);
- introduce a principles-based instruction - replacing Item 303(a)(4) ("Off-Balance Sheet Arrangements") - that would encourage registrants to assess off-balance sheet arrangements in the broader context of MD&A;
- clarify and codify existing SEC guidance under a new disclosure requirement added to Item 303; and
- modify the interim MD&A requirement in Item 303(b) to allow companies to compare their most recent quarter to either (i) the corresponding quarter of the prior year or (ii) the immediately preceding quarter.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.