Financial 2 - SEC Reporting Requirements

Question 1

Preparing Interim Financial Statements

Answer 1

• Generally accepted accounting principles that were used in the most recent annual report of an enterprise should be applied to interim FS of the current year, UNLESS a change in accounting principle is adopted in the current year
• For interim reporting, costs that benefit multiple periods should be allocated equally to those periods
• For quarterly reporting, due to the absence of seasonal fluctuations, the end of the preceding fiscal year is the appropriate period to include in addition to the most recent quarter end on the 10-Q
• The effective income tax rates for operations for the full year should reflect anticipated foreign tax rates and available tax planning alternatives. In addition, the effect of other anticipated tax credits, capital gains rates, and foreign tax credits should be included

Question 2

Entity’s Annual Financial Statements Filed with the SEC

Answer 2

• Under Regulation S-X, an entity’s audited financial statements filed with the SEC should include balance sheets for the 2 most recent fiscal years and the statements of income, changes in owner’s equity, and cash flows for the 3 fiscal years preceding the date of the most recent audited balance sheet
• “Accelerated filers” have a deadline of 75 days after the end of the fiscal year for the 10-K to be filed and have 45 days after the end of the first 3 quarters of each fiscal year to file the 10-Q
• An accelerated filer is an issuer:
  1. With a public float of greater than or equal to $75 million
  2. Subject to the Securities Exchange Act’s reporting requirements for greater than or equal to 12 months
  3. That previously filed at least 1 report
  4. Which is not eligible to file quarterly and annual reports on Forms 10-QSB and 10-KSB
• A large accelerated filer has 60 days to file 10-K
  and has 40 days to file the 10-Q (Large accelerated filer are those with floats over $700 million)

Question 3

Specific “Form” Criteria

Answer 3

• Form 8-K is a form required to be filed by all companies registered with the SEC. The form reports on major corporate events, including corporate asset acquisitions/disposals, accountant changes, financial statement changes, management changes,changes in securities, etc. **Quarterly results of operations will be reported using for 10-Q
• An XBRL FS exhibit is required to be submitted with a filer’s 10-K, 20-F, or 6-K because these filings include the filer’s FS
• Forms 3, 4, and 5 are required to be filed by directors, officers, or beneficial owners of more than 10 percent of a class of equity securities of a registered company. These do not contain the FS because they are not filed by the company
• Form 11-K: annual report of an entity’s employee benefit plan
• Form 20-F: annual report of non-U.S. registrant. Contains audited FS
• Form 10-K: annual report of a U.S. registered company. Contains audited FS
• Form 6-K: filed semiannually by foreign private issuers and contains unaudited FS
• Form 40-F filed annually by specific Canadian companies registered with the SEC. Contains audited FS

Question 4

SEC Interactive Data Rule

Answer 4

General Rule: This rule requires a U.S.public company submitting a Form 10-K to present FS, including the balance sheet, statement of comprehensive income, and all footnotes, and any applicable FS schedules, in an exhibit prepared using XBRL

*** eXtensible Business Reporting Language - freely available and global framework for exchanging business information

Question 5

SEC Regulation Criteria

Answer 5

• Regulation S-X sets forth the form and content of requirements for the interim and annual FS to be filed with the SEC
• Regulation S-B sets forth the disclosure requirements for small business issuers
• Regulation S-T sets forth rules governing electronic filings
• Regulation S-K sets forth non-financial reporting requirements for various SEC Filings used by public companies