Financial Reporting Manual 2020 - SEC

1 Division of Corporation Finance Financial Reporting Manual Disclaimer: This Manual was originally prepared by the staf of the Division of Corporation Finance to serve as internal guidance. In 2008, in an efort to increase transparency of informal staf interpretations, the Division posted a version of the Manual to its website. Because of its informal nature, the Manual does not necessarily contain a discussion of all material considerations necessary to reach an accounting or disclosure conclusion. Such conclusions about a particular transaction are very fact dependent and require careful analysis of the transaction and of the relevant authoritative accounting literature and Commission requirements.

2 The information in this Manual is non-authoritative. If it conficts with authoritative or source material, the authoritative or source material governs. The information presented also may not refect the views of other Divisions and Ofces at the Commission. The guidance is not a rule, regulation or statement of the Commission and the Commission has neither approved nor disapproved this information. The information included in this Manual may be updated from time to time and positions may change.

3 As a result, the information in this Manual may not be current. SUMMARY OF CHANGES IN CURRENT UPDATE Sections of the Financial Reporting Manual have been updated as of October 30, 2020. These sections have been marked with the date tag, Last updated: 10/30/2020, to identify the changes. P revious updates are marked using the same convention and represent the last revision to that section.

4 We include a date tag when the change is significant. Changes that are administrative in nature (for example, section reference updates or grammatical improvements) are not marked with a date tag. Below is a summary of changes included in this update and a brief description of the change. Clicking the linked section number will direct you to the location of the change in the document. You may click on the embedded link in the document to return to this page. This update does not include changes for three recent rulemakings, Financial Disclosures about Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant s Securities, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and Qualifications of Accountants.

5 For questions related to these amendments, please contact the individua l(s) listed on the related rulemaking. Topic/Section C omme nt 1340, , 5110, 5120, and Revised for amendments to Smaller Reporting Company definition pursuant to SEC Release No. 33-10513. Topics 1-6, 8-11, and 14 Revised for amendments related to SEC Release No. 33-10532, Disclosure Update and Simplification. Due to the volume of these revisions, replacing income statement with statement of comprehensive income throughout, only the Topics changed are cited.

6 1340 Revised for amendments to Accelerated Filer and Large Accelerated Filer definitions pursuant to SEC Release No. 34-88365. , 1120, Remove outdated Division of Corporation Finance guidance and GAAP references. Updated for changes to GAAP adoption dates, guidance issued by the PCAOB, D ivis ion of Corporation Finance, and Office of Chief Accountant in the last few years. 1210, , 2515, , 3250, , , 4710, 4850, , , , , , and 11200 C la r if ie d that Rule 3-13 of Regulation S-X applies only to the Financial statements included in a Form 8-K and not to the timely filing requirement of the For m its e lf.

7 , and C la r if ie d audit requirements for a special-purpose acquisition company ( SPAC ) registrant s non- Reporting target in Form S-4/Form F-4. 1 C la r if ie d R ule 3-09 of Regulation S-X income test calculation when there is more than one equity method investee. 4220 Described the impact a substantial deficiency situation may have on timely filed criteria in certain rule and form eligibility standards. 4710 Revised to include another example of when a To Be Issued Accountant s Report may be accepted.

8 2 COMMUNICATIONS WITH THE DIVISION OF CORPORATION FINANCE S OFFICE OF CHIEF ACCOUNTANT (CF-OCA) (Last updated: 3/15/2022) CF-OCA performs the following functions that may result in communications with companies and their advisors: Acts on behalf of the Commission to grant relief under Rule 3-13 of Regulation staff has authority, where consistent with investor protection, to permit registrants toomit, or substitute for, required Financial statements.

9 Requests for this relief should besubmitted by online request. Call (202) 551-3400 and ask for the appropriate personlisted below to discuss questions about potential relief:Rules 3-05 and 8-04 Jaime JohnArticle 11 and Rule 8-05 Todd HardimanRules 3-09 and 4-08(g) Jarrett TornoRules 3-10 and 3-16 Jarrett TornoRules 3-14 and 8-06 Jessica Barberich Answers interpretive request letters and provides informal interpretive advice about theform and content of Financial statements and other Financial information required to beincluded in Commission filings.

10 Requests for interpretive letters should be submittedby online request. Requests for informal interpretive advice should be submitted byonline request or by calling (202) 551-3400. While the statements made by the staffon the telephone are intended to be helpful to the persons making the inquiries, they arenot binding due to their informal nature. Helps identify and explain the applicable rules, regulations, forms, and guidance thataffect the form and content of Financial statements and other Financial informationrequired to be included in Commission filings.