5.1 Introduction
This section highlights common accounting issues addressed in preparing
financial statements for inclusion in an IPO registration statement.
While some of the guidance may be directly applicable, some of it
may be applied to IPO registration statements by analogy, may be
complex, and may require significant judgment. Understanding the
structure and substance of the transactions to effect the IPO is
critical to making sound and reasonable judgments. During its
comment process, the SEC staff will frequently ask management to
explain the basis for those judgments, alternatives considered, and
why the information provided to the user is representationally
faithful. For additional observations related to frequently issued
SEC staff comments, see Deloitte’s Roadmap SEC Comment
Letter Considerations, Including Industry
Insights.