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Appendix B — Regulation S-X, Rule 13-01, Disclosure Checklist

Appendix B — Regulation S-X, Rule 13-01, Disclosure Checklist

Appendix B — Regulation S-X, Rule 13-01, Disclosure Checklist

 
Yes
No
N/A
A. Nonfinancial Disclosures
  
If the conditions for providing the alternative disclosures in Rule 13-01 have been met (see Section 2.2), has the registrant provided the following disclosures?
   
1. “A description of the issuers and guarantors of the guaranteed security” (see Rule 13-01(a)(1)).
   
2. “A description of the terms and conditions of the guarantees, and how payments to holders of the guaranteed security may be affected by the composition of and relationships among the issuers, guarantors, and subsidiaries of the parent company that are not issuers or guarantors” (see Rule 13-01(a)(2)).
   
3. “A description of other factors that may affect payments to holders of the guaranteed security” (e.g., “contractual or statutory restrictions on dividends, guarantee enforceability, or the rights of a noncontrolling interest holder”) (see Rule 13-01(a)(3)).
   
B. Financial Disclosures
Unless the registrant has met the conditions for omitting financial information (see Section 2.3.3), has the registrant completed the following requirements?
   
1. Provide summarized financial information of the parent, issuer(s), and guarantor(s) on a combined basis (see Rule 13-01(a)(4)(i)), consisting of the following balance sheet and income statement line items as outlined in Rule 1-02(bb):
  • Current and noncurrent assets.
  • Current and noncurrent liabilities.
  • Redeemable preferred stock.
  • Noncontrolling interests.
  • Net sales or gross revenues.
  • Gross profit (or costs and expenses related to net sales or gross revenues).
  • Income (loss) from continuing operations.
  • Net income (loss).
  • Net income (loss) attributable to the entity.
   
2. Disclose additional line items as needed to provide all material information necessary for an investor’s evaluation of the sufficiency of the guarantee (see Rule 13-01(a)(6)).1
   
3. Provide summarized financial information for the most recent fiscal year and year-to-date interim period of the registrant as applicable (see Rule 13-01(a)(4)(v)).
   
4. If the information related to the terms of the guarantee and factors affecting payment of the guaranteed security apply to certain issuers or guarantors but not others, the registrant must provide either (see Rule 13-01(a)(4)(iv)):
  1. Separate summarized financial information for those issuers or guarantors to which the different terms and factors apply.
  2. Narrative disclosure if the separate financial information of those issuers or guarantors to which the different terms and factors apply can be easily understood.2
Note that if certain subsidiary guarantees are not full and unconditional or if there are multiple guarantees that are not joint and several, separate presentation of the summarized financial information or narrative disclosure may be needed.
   
5. Eliminate from the summarized financial information all transactions between the issuer(s) and guarantor(s) presented on a combined basis (see Rule 13-01(a)(4)(ii)).
   
6. Exclude from the summarized financial information all information for subsidiaries that are not guarantors or issuers (see Rule 13-01(a)(4)(iii)).
   
7. Exclude from the summarized financial information the investments of the parent, issuers, and guarantors in the subsidiaries that are not guarantors or issuers (see Rule 13-01(a)(4)(iii)).
Note that as a result of this provision, the obligor group should not include the investment balance in nonobligated subsidiaries or the obligor group’s share of earnings in subsidiaries that are not guarantors or issuers. However, the summarized financial information should reflect transactions with and amounts due to or due from subsidiaries that are not guarantors or issuers but are unrelated to the obligor group’s investment in those nonissuers or nonguarantors.
   
8. Separately present in the summarized financial information transactions with and amounts due from or due to:
  1. “Subsidiaries that are not issuers or guarantors” (i.e., those amounts that do not arise from the issuers’ or guarantors’ investment in the nonguarantors).
  2. Other related parties (i.e., those that would be disclosed in the consolidated financial statements) (see Rule 13-01(a)(4)(iii)).
Note that if material, transactions and amounts related to (a) should be presented separately from those related to (b).
   
C. Broad Disclosure Obligation
   
Has the registrant met the following requirements?
   
1. Present any other financial or narrative disclosures about the guarantors “if the information would be material for investors to evaluate the sufficiency of the guarantee” (see Rule 13-01(a)(6)).
   
2. Provide sufficient information “to make the financial and non-financial information presented not misleading” (see Rule 13-01(a)(7)).
   
D. Location of Alternative Disclosure
   
In Form 10-K, Form 10-Q, or Form 20-F, has the registrant provided the alternative disclosures in the footnotes to the financial statements or in MD&A (see Rule 13-01(b))?
Note that registrants providing these disclosures in the footnotes to the financial statements must ensure that such disclosures are audited (Form 10-K or Form 20-F) or reviewed (Form 10-Q). In addition, disclosures included in the financial statements must be XBRL tagged and are subject to ICFR, whereas disclosures in MD&A do not require XBRL tagging and are subject to disclosure controls and procedures.
   
E. Exhibit Requirements
   
Has the registrant filed an exhibit that, for each guaranteed security registered or to be registered, lists the subsidiaries that issue, co-issue, or guarantee the security (Item 601(b)(22) of Regulation S-K)?
   
F. For Registration Statements Only — Additional Requirements
   
1. If the alternative disclosures have not been provided either in the footnotes to the financial statements or in MD&A, have they been provided in the section immediately after “Risk Factors” (see Rule 13-01(b))?
   
2. Has the registrant disclosed preacquisition summarized financial information for recently acquired guarantor or issuer subsidiaries if all the following are true (see Rule 13-01(a)(5))?
  1. The recently acquired subsidiaries guaranteed, issued, or co-issued the registered securities being offered.
  2. The recently acquired subsidiaries are a business in accordance with Regulation S-X, Rule 11-01(d).
  3. The recently acquired subsidiaries are not yet reflected in the most recent balance sheet of the registrant.
  4. The recently acquired subsidiaries are significant in accordance with Rule 3-05.
   

Footnotes

1
The SEC’s March 2020 final rule states, “For example, if substantially all of the obligated entities’ non-current assets consisted of goodwill, separate presentation of goodwill from non-current assets would be required if the parent company concludes such disclosure would be material for investors to evaluate the sufficiency of the guarantee.”
2
For example, if contractual or statutory restrictions apply to one subsidiary guarantor and that subsidiary guarantor constitutes a similar percentage of the obligor group’s assets, liabilities, and operations, narrative disclosure may be permissible depending on the facts and circumstances.