CAQ Releases Highlights of September 30, 2021, and March 31, 2022, Joint Meetings With the SEC Staff

The Center for Audit Quality (CAQ) has published highlights of the September 30, 2021, and March 31, 2022, CAQ SEC Regulations Committee joint meetings with the SEC staff.

Topics discussed at the September 30, 2021, meeting included:

• Requirements for pre-merger SPAC financial statements after a de-SPAC transaction in which the SPAC was the accounting acquirer.
• Using pro forma financial information to test significance under Regulation S-X, Rule 3-05, in a registration statement, including situations in which the registrant presents successor/predecessor periods.
• Applicability of the revenue component of the income test when the significance of an investee that is accounted for by using the fair value option is tested under Regulation S-X, Rule 3-09.
• The Division of Corporation Finance’s Sample Letter to Companies Regarding Climate Change Disclosures.

Topics discussed at the March 31, 2022, meeting included:

• Financial reporting issues related to Russia’s invasion of Ukraine, including certain non-GAAP adjustments.
• Use of a double dummy structure for a de-SPAC transaction.
• Loss of emerging growth company status in a de-SPAC transaction.
• Determination of whether a target in a SPAC transaction qualifies as a smaller reporting company (SRC).
• Considerations related to performing significance tests under Regulation S-X, Rule 3-05, when a registrant’s non-wholly-owned consolidated subsidiary acquires a business.
• Applicability of the revenue component of the income test under Regulation S-X, Rule 1-02(w), to a registrant that is a successor to a predecessor company.
• Financial statement disclosure requirements related to SRCs with significant equity method investees, including the application of the revenue component of the income test.