A Roadmap to Initial Public Offerings

This Roadmap addresses financial reporting, accounting, and auditing considerations to help companies navigate challenges related to preparing an IPO registration statement and ultimately going public.

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Preface Acknowledgments Contacts Chapter 1 — Introduction to Initial Public Offerings Chapter 2 — Identifying the Required Financial Statements for the Registration Statement Chapter 3 — Financial Statement Preparation and Disclosure Requirements Chapter 4 — Other Registration Statement Reporting Chapter 5 — Accounting Matters Chapter 6 — Audit Considerations Chapter 7 — What to Expect After the Registration Statement Is Declared Effective Appendix A — Common Disclosures on Form S-1 Appendix B — Summary of Scaled Disclosure Requirements Available to SRCs Appendix C — Key Benefits Available to EGCs and Non-EGCs Appendix D — Changes Made in the 2019 Edition of This Publication Appendix E — Titles of Standards and Other Literature Appendix F — Abbreviations

Promoting the U.S. IPO market has been a priority for SEC Chairman Jay Clayton. On September 26, 2017, Chairman Clayton made the following statement before the U.S. Senate Committee on Banking, Housing, and Urban Affairs:

It is clear to me that companies that go through the U.S. IPO process emerge as better companies, with better disclosure. We want to encourage and preserve that dynamic. Overall, the SEC will strive for efficiency in our processes to encourage more companies to consider going public, which will result in more choices for investors, job creation and a stronger U.S. economy.

As further evidence of its commitment to promoting the U.S. IPO market, the SEC issued a proposed rule on February 19, 2019, which would expand the “test-the-waters” accommodation and allow all prospective issuers to gauge market interest in a possible IPO by permitting discussions with certain investors before the filing of a registration statement. Previously, the test-the-waters accommodation was only available to emerging growth companies (EGCs). In the press release on the proposed rule, SEC Chairman Jay Clayton noted the following:

Extending the test-the-waters reform to a broader range of issuers is designed to enhance their ability to conduct successful public securities offerings and lower their cost of capital, and ultimately to provide investors with more opportunities to invest in public companies . . . I have seen first-hand how the modernization reforms of the JOBS Act have helped companies and investors. The proposed rules would allow companies to more effectively consult with investors and better identify information that is important to them in advance of a public offering.

In addition, as part of its disclosure effectiveness initiative, the SEC has been exploring ways to make going public in the U.S. markets more attractive while still protecting investors.