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.
5.2 Financial Statements of Businesses Acquired or to Be Acquired (SEC Regulation S-X, Rule 3-05)
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.
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.
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.