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Chapter 2 — Guaranteed Debt Securities

2.3 Alternative Disclosure Requirements

2.3 Alternative Disclosure Requirements

If a registrant or one of its consolidated subsidiaries has issued registered guaranteed debt securities, it is presumed that an investor in those securities relies on the registrant‘s consolidated financial statements as the primary source of information when making investment decisions. Therefore, under Rule 13-01, a registrant is permitted to provide alternative disclosures in lieu of separate financial statements for any issuers and guarantors of the registered guaranteed debt securities. Such alternative disclosures, which include both financial and nonfinancial disclosures about the issuer(s) and guarantor(s) (discussed below), may be provided in the registrant’s periodic filings (e.g., Forms 10-K and 10-Q) or registration statements if the eligibility conditions discussed in Section 2.2 have been met. In conjunction with the registrant’s consolidated financial statements, these alternative disclosures are intended to give investors material information to evaluate the sufficiency of the guarantees.

Footnotes

1
Rule 1-02(bb) indicates that “[f]or specialized industries in which classified balance sheets are normally not presented, information shall be provided as to the nature and amount of the majority components of assets and liabilities.”
2
See footnote 1.
3
Rule 1-02(bb) indicates that “[f]or specialized industries, other information may be substituted for sales and related costs and expenses if necessary for a more meaningful presentation.”
4
See footnote 3.
5
Rule 13-01(a)(4)(vi) states, in part, that a “finance subsidiary” is a subsidiary that “has no assets or operations other than those related to the issuance, administration and repayment of the security being registered and any other securities guaranteed by its parent company.”
6
A registrant determines whether a “business” has been acquired in accordance with the guidance in Regulation S-X, Rule 11-01(d), and whether the acquisition of a “related” business is treated as a single business acquisition in a manner consistent with Regulation S-X, Rule 3-05(a)(3). An acquired business is deemed significant on the basis of the same significance tests and thresholds used to determine whether preacquisition financial statements are required for an acquired business under Rule 3-05; in such a determination, 20 percent is substituted for 10 percent any place it appears in Regulation S-X Rule 1-02(w). See Deloitte’s Roadmap SEC Reporting Considerations for Business Acquisitions for further details on determining whether an acquisition is a significant business.