B.1 Background
SEC Regulation S-X, Article 11, describes the circumstances in which pro forma
financial information should be presented in filings with the SEC, the form of such
presentation, and the guidance for an entity to consider in preparing such
information. Article 11 does not require that pro forma financial information be
presented in a Form 10-K or Form 10-Q filed under the Exchange Act or in the
historical financial statements of an acquired entity. Rather, the types of SEC
filings for which Article 11 may require entities to present pro forma financial
information, such as pro forma EPS, include the following:
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Registration statements under the Securities Act.
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Registration statements under the Exchange Act (i.e., a Form 10).
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Form 8-K.
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Proxy statements.
When Article 11 requires pro forma financial information in a filing with the
SEC, each pro forma income statement should include pro forma basic and diluted EPS
from continuing operations that applies to the controlling interest and that
reflects the transaction that has occurred, or whose occurrence is probable, for
which the pro forma financial information is needed.
In addition to Article 11, other SEC guidance and U.S. GAAP may also require the
presentation or disclosure of pro forma EPS in certain circumstances. Article 11
prohibits registrants from presenting pro forma financial information on the face of
their historical financial statements or in the accompanying notes except when such
presentation is required by U.S. GAAP. Therefore, pro forma EPS should only be
presented outside the historical financial statements unless the information must be
included or disclosed in the historical financial statements in accordance with U.S.
GAAP. Item 9.01 of Form 8-K also refers to certain requirements to present pro forma
financial information under Article 11 (see Section B.2.1.8). In all cases, pro forma EPS
amounts should be labeled as unaudited.
Section B.2
discusses SEC and other guidance (not all-inclusive) that may require an entity to
present or disclose pro forma EPS. Section B.3 addresses considerations related to the calculation of
pro forma EPS. Section
B.4 provides examples illustrating the calculation of pro forma EPS.
The discussion in this appendix includes references to the FRM (updated as of
December 2022).
In addition to this appendix, the following Deloitte Roadmaps contain guidance relevant to pro forma financial information: