Appendix D — SEC Interim Reporting Considerations
Regulation S-X, Article 10, outlines the financial statement
requirements for interim financial reporting. Such requirements include:
- “Interim statements of cash flows . . . for the period between the end of the preceding fiscal year and the end of the most recent fiscal quarter [year-to-date statements], and for the corresponding period of the preceding fiscal year” (Regulation S-X, Article 10-01(c)(3)).1
- Issuers, although required to present year-to-date
statements as described above, may present additional periods,
specifically:
- “[T]he cumulative twelve month period ended during the most recent fiscal quarter and for the corresponding preceding period” in accordance with Regulation S-X, Article 10-01(c)(3).
- A statement of cash flows for the most recent fiscal quarter, and for the corresponding period of the preceding fiscal year, is not prohibited.
- Interim statements of cash flows and related footnotes may be presented on a condensed basis in a level of detail permitted by Article 10 but will need to be supplemented by disclosure of any material matters that were not disclosed in the most recently issued annual financial statements.
- Regulation S-X, Article 10-01(a)(4), states that “[t]he statement of cash flows may be abbreviated starting with a single figure of net cash flows from operating activities and showing cash changes from investing and financing activities individually only when they exceed 10% of the average of net cash flows from operating activities for the most recent three years. Notwithstanding this test, § 210.4-02 applies and de minimis amounts therefore need not be shown separately.”
In addition, while ASC 230 requires disclosure of noncash investing
and financing items and that the amount of interest (net of amounts capitalized) and
income taxes paid (for entities reporting under the indirect method) be disclosed
during the “period,” the guidance is not clear on whether “period” was intended to
include interim reporting periods. Further, while Regulation S-X, Article 10, does
not provide for similar disclosure requirements regarding noncash items and amounts
paid for interest and income taxes, many registrants provide one or more of these
when such information (1) represents a material change from the preceding
comparative period; (2) exceeds the 10 percent threshold discussed in Regulation
S-X, Article 10-01(a)(4) (as noted above); or (3) is believed to be informative to
users of the interim financial statements.
Footnotes
1
Regulation S-X, Article 10-01(c)(4), notes that
“registrants engaged in seasonal production and sale of a
single-crop agricultural commodity may provide interim statements of
. . . cash flows for the twelve month period ended during the most
recent fiscal quarter and for the corresponding preceding period in
lieu of the year-to-date statements specified in paragraphs (c)(2)
and [(c)(3) of Article 10].”