Heads Up Newsletter

This issue discusses actions that might be taken by the SEC or FASB as a result of the relief extended to banks and credit unions by the newly enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act.

This issue discusses FASB Accounting Standards Update No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides entities with optional expedients and exceptions related to the application of U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if specified criteria are satisfied.

This issue discusses the SEC’s recently issued final rule Amendments to the Accelerated Filer and Large Accelerated Filer Definitions, which expands the eligibility criteria for nonaccelerated filer status to include issuers that qualify as smaller reporting companies with annual revenues of less than $100 million and public float of less than $700 million. The final rule is intended to promote capital formation while maintaining investor protection by expanding the number of issuers that are eligible to take advantage of certain reporting accommodations offered to nonaccelerated filers.

This issue discusses SEC Final Rule Release No. 33-10762, Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities (the “final rule”). The final rule simplifies the disclosure requirements related to certain registered securities under SEC Regulation S-X, Rules 3-10 and 3-16, which currently require separate financial statements for (1) subsidiary issuers and guarantors of registered debt securities unless certain exceptions are met and (2) affiliates that collateralize registered securities offerings if the affiliates’ securities are a substantial portion of the collateral. Under the final rule, alternative financial disclosures or narrative disclosures (referred to collectively as “Alternative Disclosures”) may be provided in lieu of separate financial statements of the guarantors or affiliates. The amendments in the final rule are generally effective for filings on or after January 4, 2021, with early application permitted.

This issue discusses the SEC’s recently issued proposed rule Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information, which would modernize Management’s Discussion and Analysis (MD&A) and certain financial disclosure requirements in SEC Regulation S-K.

Calendar-year-end public business entities adopted the FASB’s new leasing standard (ASC 842) on January 1, 2019. This Heads Up outlines the ASC 842 disclosure requirements, elaborates on some of those requirements, and provides examples of related SEC comments issued to registrants in 2019.