1.3 Summarized Financial Information
In the determination of whether summarized financial information is
required in the footnotes to the annual financial statements under Rule 4-08(g), a registrant must apply all three
significance tests. The test that results in the highest significance level will be
used to establish the financial reporting requirements.
Under SEC rules, on the basis of the highest test result:
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If the significance of an equity method investee, individually or as part of an aggregated group, is 10 percent or less for all years presented, summarized financial information is not required.
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If the significance of an equity method investee, individually or as part of an aggregated group, is greater than 10 percent, the registrant’s annual financial statements must include summarized financial information for all equity method investees. Such information should not be labeled “unaudited.”
In certain circumstances, summarized financial information otherwise
required by Rule 4-08(g) may be omitted if separate financial statements of the
equity method investee are included when the registrant files its Form 10-K. See
Section 4.3 for
additional interpretive guidance on this accommodation provided by SAB Topic 6.K.4(b).