Article 8 Financial Statements of Smaller Reporting Companies
Source:
73 FR 953, Jan. 4, 2008, unless otherwise noted.
210.8-01 — General requirements for Article 8.
Sections 210.8-01 through 210.8-08 (Article 8) shall be applicable to financial
statements filed for smaller reporting companies. These sections are not applicable to
financial statements prepared for the purposes of Item 17 or Item 18 of Form 20-F.
(a) Financial statements of a smaller reporting company, as defined by
§ 229.10(f)(1) of this chapter, its predecessors or any businesses to which the smaller
reporting company is a successor shall be prepared in accordance with generally accepted
accounting principles in the United States.
(b) Smaller reporting companies electing to prepare their financial statements
with the form and content required in Article 8 need not apply the other form and content
requirements in Regulation S-X with the exception of the following:
(1) The report and qualifications of the independent accountant shall comply
with the requirements of §§ 210.2-01 through 210.2-07 (Article 2); and
(2) The description of accounting policies shall comply with § 210.4-08(n);
and
(3) Smaller reporting companies engaged in oil and gas producing activities
shall follow the financial accounting and reporting standards specified in § 210.4-10 with
respect to such activities
(c) Financial statements for a subsidiary of a smaller reporting company that
issues securities guaranteed by the smaller reporting company or guarantees securities
issued by the smaller reporting company must be presented as required by § 210.3-10, except
that the periods presented are those required by § 210.8-02.
(d) Financial statements for a smaller reporting company's affiliates whose
securities constitute a substantial portion of the collateral for any class of securities
registered or being registered must be presented as required by § 210.3-16, except that the
periods presented are those required by § 210.8-02.
(e) The Commission, where consistent with the protection of investors, may
permit the omission of one or more of the financial statements or the substitution of
appropriate statements of comparable character. The Commission by informal written notice
may require the filing of other financial statements where necessary or appropriate.
(f) Section 210.3-06 applies to the preparation of financial statements of
smaller reporting companies.
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Note 3 to § 210.8: The requirements of § 210.3-10 are applicable to financial
statements for a subsidiary of a smaller reporting company that issues
securities guaranteed by the smaller reporting company or guarantees securities
issued by the smaller reporting company. Disclosures about guarantors and
issuers of guaranteed securities registered or being registered must be
presented as required by § 210.13-01.
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Note 4 to § 210.8: The requirements of § 210.3-16 or § 210.13-02 are applicable
if a smaller reporting company's securities registered or being registered are
collateralized by the securities of the smaller reporting company's affiliates.
Section 210.13-02 must be followed unless § 210.3-16 applies. The periods
presented for purposes of compliance with § 210.3-16 are those required by
§ 210.8-02.
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[As amended at 83 FR 50148, Oct. 4, 2018; 85 FR 21940, April 20, 2020; 85 FR
21940, April 20, 2020; 85 FR 54002, Aug. 31, 2020]
210.8-02 — Annual financial statements.
Smaller reporting companies must file an audited balance sheet for the
registrant and its subsidiaries consolidated and for its predecessors as of the end of each
of the most recent two fiscal years, or as of a date within 135 days if the issuer has
existed for a period of less than one fiscal year, and audited statements of comprehensive
income, cash flows and changes in stockholders' equity for each of the two fiscal years
preceding the date of the most recent audited balance sheet (or such shorter period as the
registrant has been in business).
[As amended at 83 FR 50148, Oct. 4, 2018; 89 FR 14158, Feb. 26, 2024]
210.8-03 — Interim financial statements.
Interim financial statements may be unaudited; however, before filing, interim financial statements included in quarterly reports on Form 10-Q (§ 249.308(a) of this chapter) must be reviewed by an independent public accountant using applicable professional standards and procedures for conducting such reviews, as may be modified or supplemented by the Commission. If, in any filing, the issuer states that interim financial statements have been reviewed by an independent public accountant, a report of the accountant on the review must be filed with the interim financial statements. Interim financial statements shall include a balance sheet as of the end of the issuer's most recent fiscal quarter, a balance sheet as of the end of the preceding fiscal year, and statements of comprehensive income and statements of cash flows for the interim period up to the date of such balance sheet and the comparable period of the preceding fiscal year.
(a) Condensed format. Interim financial statements may be condensed as follows:
(1) Balance sheets should include separate captions for each balance sheet component presented in the annual financial statements that represents 10% or more of total assets. Cash and retained earnings should be presented regardless of relative significance to total assets. Registrants that present a classified balance sheet in their annual financial statements should present totals for current assets and current liabilities.
(2) Statements of comprehensive income (or the statement of net income if comprehensive income is presented in two separate but consecutive financial statements) should include net sales or gross revenue, each cost and expense category presented in the annual financial statements that exceeds 20% of sales or gross revenues, provision for income taxes, and discontinued operations. (Financial institutions should substitute net interest income for sales for purposes of determining items to be disclosed.)
(3) Cash flow statements should include cash flows from operating, investing and financing activities as well as cash at the beginning and end of each period and the increase or decrease in such balance.
(4) Additional line items may be presented to facilitate the usefulness of the interim financial statements, including their comparability with annual financial statements.
(5) Provide the information required by § 210.3-04 for the current and comparative year-to-date periods, with subtotals for each interim period.
(b) Disclosure required and additional instructions as to content — (1) Footnotes. Footnote and other disclosures should be provided as needed for fair presentation and to ensure that the financial statements are not misleading.
(2) [Reserved]
(3) Significant equity investees. Sales, gross profit, net income (loss) from continuing operations, net income, and net income attributable to the investee must be disclosed for equity investees that constitute 20 percent or more of a registrant's consolidated assets, equity or income from continuing operations attributable to the registrant.
(4) [Reserved]
(5) Material accounting changes. The registrant's independent accountant must provide a letter in the first Form 10-Q (§ 249.308a of this chapter) filed after the change indicating whether or not the change is to a preferable method. Disclosure must be provided of any retroactive change to prior period financial statements, including the effect of any such change on income and income per share.
(6) Financial statements of and disclosures about guarantors and issuers of guaranteed
securities. The requirements of § 210.3-10 are applicable to financial statements for
a subsidiary of a smaller reporting company that issues securities guaranteed by the smaller
reporting company or guarantees securities issued by the smaller reporting company.
Disclosures about guarantors and issuers of guaranteed securities registered or being
registered must be presented as required by § 210.13-01.
(7) Disclosures about affiliates whose securities collateralize an issuance.
Disclosures about a smaller reporting company's affiliates whose securities collateralize
any class of securities registered or being registered and the related collateral
arrangement must be presented as required by § 210.13-02.
Instruction 1 to § 210.8-03: Where §§ 210.8-01 through 210.8-08 (Article 8 of this part) are applicable to a Form 10-Q (§ 249.308a of this chapter) and the interim period is more than one quarter, statements of comprehensive income must also be provided for the most recent interim quarter and the comparable quarter of the preceding fiscal year.
Instruction 2 to § 210.8-03: Interim financial statements must include all adjustments that, in the opinion of management, are necessary in order to make the financial statements not misleading. An affirmative statement that the financial statements have been so adjusted must be included with the interim financial statements.
[73 FR 953, Jan. 4, 2008, as amended at 74 FR 18615, Apr. 23, 2009; 83 FR
50148, Oct. 4, 2018; 85 FR 21940, April 20, 2020; 85 FR 54002, Aug. 31, 2020]
210.8-04 — Financial statements of businesses acquired or to be acquired.
Apply § 210.3-05 substituting §§ 210.8-02 and 210.8-03, as applicable, wherever
§ 210.3-05 references §§ 210.3-01 and 210.3-02.
[73 FR 953, Jan. 4, 2008, as amended at 74 FR 18616, Apr. 23, 2009; 83 FR
50148, Oct. 4, 2018; 85 FR 54002, Aug. 31, 2020]
210.8-05 — Pro forma financial information.
(a) Pro forma financial information must be disclosed when any of the
conditions in § 210.11-01 exist.
(b) The preparation, presentation, and disclosure of pro forma financial
information must comply with §§ 210.11-01 through 210.11-03 (Article 11), except that the
pro forma financial information may be condensed pursuant to § 210.8-03(a).
[As amended at 83 FR 50148, Oct. 4, 2018; 85 FR 54002, Aug. 31, 2020]
210.8-06 — Real estate operations acquired or to be acquired.
Apply § 210.3-14 substituting §§ 210.8-02 and 210.8-03, as applicable, wherever
§ 210.3-14 references §§ 210.3-01 and 210.3-02.
[As amended at 83 FR 50148, Oct. 4, 2018; 85 FR 54002, Aug. 31, 2020]
210.8-07 — Limited partnerships.
(a) Smaller reporting companies that are limited partnerships must provide the balance sheets of the general partners as described in paragraphs (b) through (d) of this section.
(b) Where a general partner is a corporation, the audited balance sheet of the corporation as of the end of its most recently completed fiscal year must be filed. Receivables, other than trade receivables, from affiliates of the general partner should be deducted from shareholders' equity of the general partner. Where an affiliate has committed itself to increase or maintain the general partner's capital, the audited balance sheet of such affiliate must also be presented.
(c) Where a general partner is a partnership, there shall be filed an audited balance sheet of such partnership as of the end of its most recently completed fiscal year.
(d) Where the general partner is a natural person, there shall be filed, as supplemental information, a balance sheet of such natural person as of a recent date. Such balance sheet need not be audited. The assets and liabilities should be carried at estimated fair market value, with provisions for estimated income taxes on unrealized gains. The net worth of such general partner(s), based on such balance sheet(s), singly or in the aggregate, shall be disclosed in the registration statement.
210.8-08 — Age of financial statements.
At the date of filing, financial statements included in filings other than filings on Form 10-K must be not less current than the financial statements that would be required in Forms 10-K and 10-Q if such reports were required to be filed. If required financial statements are as of a date 135 days or more before the date a registration statement becomes effective or proxy material is expected to be mailed, the financial statements shall be updated to include financial statements for an interim period ending within 135 days of the effective or expected mailing date. Interim financial statements must be prepared and presented in accordance with paragraph (b) of this section.
(a) When the anticipated effective or mailing date falls within 45 days after the end of the fiscal year, the filing may include financial statements only as current as of the end of the third fiscal quarter; Provided, however, that if the audited financial statements for the recently completed fiscal year are available or become available before effectiveness or mailing, they must be included in the filing; and
(b) If the effective date or anticipated mailing date falls after 45 days but within 90 days of the end of the smaller reporting company's fiscal year, the smaller reporting company is not required to provide the audited financial statements for such year end provided that the following conditions are met:
(1) If the smaller reporting company is a reporting company, all reports due must have been filed;
(2) For the most recent fiscal year for which audited financial statements are not yet available, the smaller reporting company reasonably and in good faith expects to report income from continuing operations attributable to the registrant before taxes; and
(3) For at least one of the two fiscal years immediately preceding the most recent fiscal year the smaller reporting company reported income from continuing operations attributable to the registrant before taxes.
[73 FR 953, Jan. 4, 2008, as amended at 74 FR 18616, Apr. 23, 2009]