SEC Staff Updates Financial Reporting Manual

The SEC’s Division of Corporation Finance (the “Division”) has published an update to its Financial Reporting Manual (FRM). The update:

• Revises Sections 1340, 2030.1, 5110, 5120, and 5210.2 in response to amendments to the definition of smaller reporting company under SEC Final Rule Release 33-10513.
• Updates Topics 1–6, 8–11, and 14 to replace “income statement” with “statement of comprehensive income.”
• Revises Section 1340 for amendments to the definitions of accelerated filer and large accelerated filer under SEC Final Rule Release 34-88365.
• Removes outdated Division guidance and GAAP references. In addition, updates are being made in response to changes in GAAP adoption dates as well as guidance issued by the PCAOB, Division, and Office of Chief Accountant over the past few years.
• Clarifies (in Section 2050.1) that Regulation S-X, Rule 3-13, applies only to the financial statements included in a Form 8-K and not to the requirement itself for filing the form in a timely manner.
• Makes clarifications to Sections 1140.5, 2200.7, and 4110.5 for audit requirements related to a special-purpose acquisition company registrant’s nonreporting target in Form S-4/Form F-4.
• Makes clarifications (in Section 2410.4) regarding the income test calculation under Regulation S-X, Rule 3-09, when there is more than one equity method investee.
• Describes (in Section 4220) the impact a substantial-deficiency situation may have on the “timely filed” criteria in certain rule and form eligibility standards.
• Revises Section 4710 to include another example of when a “to be issued” accountant’s report may be accepted.

For more information, see the FRM on the SEC’s Web site.