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. 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.

2 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. 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. 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.

3 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. 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.

4 Due to the volume of these revisions, replacing income statement with statement of comprehensive income throughout, only the Topics changed are cited. 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 . , 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.

5 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. 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.

6 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. 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.

7 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. Requests for this assistance should besubmitted by online request or by calling (202) TABLE OF CONTENTS EXPLANATION OF ABBREVIATIONS TOPIC 1: REGISTRANT S Financial STATEMENTS 1100 Financial State me nts and Sche dule s in Re gis tration and Proxy State me nts 1110 Audited Annual Financial Statements 1120 Unaudited Interim P eriod Financial Statements 1130 Supplemental Schedules 1140 P roxy Statements 1150 Bank Reorganizing under Newly-formed Holding Company 1160 Recently Organized Registrant 1170 Predecessor Financial Statements 1180 [Reserved] 1190 Supplemental and Restated Financial Statements Related to Post -Balance Sheet Events 1200 Age of Financial State me nts in Re gis tration or Proxy State me nts 1210 Staff Review 1220 Age Requirements 1300 Pe riodic Re porting Re quire me nts (Exchange Act Filings ) 1310 Companies Required to Report 1320 Financial Statements Required 1330 Exchange Act Report Due Dates 1340 Accelerated and Large Accelerated Filer Status.

8 Entering, Exiting and I mplic a tions 1350 [Reserved] 1360 Changes in Fiscal Year General 1365 Changes in Fiscal Year Implementation Guidance 1370 Combined P eriodic Reporting 1400 Ge ne ral Cons ide rations (All Filings ) 1410 Basis of Reporting 1420 [Reserved] 1430 Guaranteed Securities 1440 [Reserved] 1450 Fiscal Year Presentation 1500 Inte rim Pe riod Re porting Cons ide rations (All Filings ) 1600 Se le cted Financial Data (All Filings ) 1610 [Reserved] 1620 Selected Quarterly Financial Data Not Required 4 TOPIC 2: OTHER Financial STATEMENTS REQUIRED 2000 B us ine sses Acquire d or to be Acquire d 2005 Definitions and Requirements 2010 Determination of a Business 2015 Measuring Significance Basics 2020 Implementation P oints Amounts Used to Measure Significance 2025 Implementation P oints Financial Statements Used to Measure Signif ic a nc e 2030 Financial Statement P eriods Required Under S-X 3-05 and S-X 8-04 2035 Individua lly Insignificant Acquirees 2040 When to Present Financial Statements 2045 Age of Financial Statements Basics 2050 Age of Financial Statements Interaction of S-X 3-05(b)(4) and Instruction to Item of Form 8-K 2055 Foreign Business, Hostile Tender Offers, and Troubled Financial Institutions 2060 Flowchart Overview of S-X 3-05 2065 Acquisitions of Selected P arts of an Entity 2070 SAB 80.

9 Application of S-X 3-05 in I nitia l R e gis tration Statements 2100 Dis pos ition of a B us ine ss 2110 D e f initions 2120 When are Financial Statements Required? 2130 Form 8-K Measuring Significance of a Disposed Business 2200 Financial State me nts of Targe t Companie s in Form S-4 2300 Re al Es tate Acquis itions and Prope rtie s Se curing M ortgages 2305 Real Estate Operations - Overview 2310 Real Estate Operations When to Present Financial Statements 2315 Real Estate Operations Measuring Significance 2320 Real Estate Operations Individua lly Insignificant Acquisitions 2325 Real Estate Operations Special Requirements for Blind P ool Offerings 2330 Real Estate Operations Required Financial Statements 2335 REIT Formation Transactions 2340 P roperties Subject to Tr iple Net Lease 2345 P roperties Securing Loans, which in Economic Substance Represent an Investment in Real Estate, including Acquisition Development and Construction (ADC)

10 Arrangements 2350 P roperties Securing Loans that Represent an Asset Concentration [SAB Topic 1I] 2355 [Reserved] 2360 P roxy Statements for Acquisitions of Real Estate Operating P roperties 5 2400 Equity M e thod Inve stments, Including Fair Value Option 2405 Required Financial Statements 2410 Measuring Significance 2415 Combined/Consolidated Financial Statements of Investees 2420 Summarized Financial Data Registrants Subject to S-X 2425 Foreign Business Investees 2430 R e lie f 2435 ASC 825 Fair Value Option for an Equity Method Investment and S-X 3-09 and S-X 4-08(g) 2500 Guaranto rs o f Se curitie s 2510 Exceptions to the General Rule 2515 Condensed Consolidat ing Financial Information 2520 Implementation Issues 2530 Recently Acquired Guarantor Subsidiaries 2540 P eriodic Reporting by Subsidiary Issuers and Guarantors 2600 Collate ralizations 2610 Measuring Substantial P ortion of the Collateral 2620 When Financial Statements are Required 2630 Implementation Issues 2700 Cre dit Third Party Financial State me nts 2705 Asset-Backed Securities P resentation of Certain Third P arty Financial Information 2710 Third P arty Credit Enhancements for Securities that are NOT Asset-backed Securities 2800 Othe r Financial State me nts 2805 General Partner, Where Registrant is a Limited Partnership 2810 Parent-Only Financial Statements (Condensed) 2815 Fina ncial Statements of a Significant Customer 2820 Substantial Asset Concentration TOPIC 3.