Chapter 5 — SEC Reporting Topics
As discussed in Section
1.1, there are several situations in which
carve-out financial statements may be requested (or required) in an
SEC filing. Preparation of carve-out financial statements is often
complex, and the form and content of those financial statements may
vary depending on the requirements of the users of the financial
statements or any applicable regulations.
Circumstances in which carve-out financial statements may be requested (or
required) to meet the SEC’s requirements include the following:1
-
Registrant and its predecessor — Carve-out financial statements that comply with the general financial statement requirements in SEC Regulation S-X, Rules 3-01 through 3-04, may be required for a registrant and its predecessor in an initial registration statement (e.g., Form 10, Form S-1, Form S-4).2 In addition, these carve-out financial statements of the registrant and its predecessor would be provided in Forms 10-K and 10-Q after the initial registration statement is declared effective (see Section 5.1).
-
Businesses acquired or to be acquired — When a registrant acquires, or it is probable that it will acquire, a significant business (acquiree), the registrant may be required to file certain acquiree financial statements in accordance with SEC Regulation S-X, Rule 3-05. These financial statements, which may be in the form of carve-out financial statements or abbreviated financial statements, may be required in a Form 8-K, a registration statement, or a proxy statement (see Section 5.2).
-
Acquired or to be acquired real estate operations — When a registrant acquires, or it is probable that it will acquire, significant real estate operations,3 the registrant may be required to file abbreviated income statements for the acquired or to be acquired real estate operations in accordance with SEC Regulation S-X, Rule 3-14. These abbreviated income statements may be required in a Form 8-K, a registration statement, or a proxy statement (see Section 5.3).
The sections below discuss the form and content of carve-out financial statements under the various SEC requirements.
Footnotes
1
Carve-out financial statements may also
be provided in a nonpublic offering, such as a
private placement in accordance with SEC Regulation
D or Rule 144A of the Securities Act of 1933 (the
“Securities Act”). While the requirements discussed
in this chapter do not strictly apply to private
offerings, it is generally standard practice to
comply with these rules as if they were
applicable.
2
As noted in Section 5.2.3, the SEC
may consider requests to provide abbreviated
financial statements for an acquired business
identified as a predecessor of the registrant.
3
Regulation S-X, Rule
3-14(a)(2)(i), states that “the term real
estate operations means a business (as set
forth in [Regulation S-X, Rule 11-01(d)]) that
generates substantially all of its revenues
through the leasing of real property.” Examples of
real estate operations include office, apartment,
and industrial buildings, as well as shopping
centers and malls.