The pace of regulatory developments in financial reporting has accelerated significantly. Standard setters and regulators have transformed both accounting standards and the format of financial reporting, resulting in vast changes to not only how accounting is recorded, but also how financial results are reported. Proper handling of these accounting and reporting changes is a key factor in the effectiveness of a company’s external financial reporting function.
Unlike some former presidents, Mr. Trump has taken a noticeable interest in SEC policy. In August 2018, he asked the Commission to study switching corporate financial reporting to a biannual schedule in place of the current quarterly system.
To find out what market observers see as the best ways to address this matter, Mergermarket on behalf of Toppan Merrill spoke with four experts.
Toppan Merrill question: President Trump has contributed to the debate regarding the merits of quarterly vs biannual financial reporting. What benefits and drawbacks do you feel would accompany a switch to a biannual reporting period? Leading industry experts weigh in...
01 May 2019
FAST Act Improves Digital Access to SEC Filings With Hyperlinks to Information Incorporated by Reference
Imagine a prospective investor, reading business news on her phone: a public company’s stock is rising after their recent earnings announcement. Curious to know more, she taps the highlighted text to read their press release which then opens the company’s filings on the SEC website. Uncertain how to navigate SEC.gov, she opens the first filing listed. Scrolling through the latest offering materials it directs investors to “see our recent annual report (10-K) incorporated by reference here.” She clicks on the text to open the Annual Report but nothing happens. This is the reality for most SEC filings today: information incorporated from one filing into another is not easily accessible. This all changes beginning May 2, 2019.
16 April 2019
On March 20, 2019, the SEC adopted final rule amendments, in connection with the FAST Act, which have expanded the scope of XBRL tagging requirements to the cover page of Forms 8-K, 10-Q, 10-K, 20-F, and 40-F (annual reports) using Inline XBRL. The cover page tagging will be phased-in beginning in July/August 2019.
04 April 2019
The SEC has adopted final rule amendments, in connection with the FAST Act, which have expanded the amount of information subject to the SEC’s XBRL-tagging requirement. The rule includes the tagging of all information on the cover page of Forms 8-K, 10-Q, 10-K, 20-F, and 40-F (annual reports) using Inline XBRL.
On March 20, 2019, the Securities and Exchange Commission adopted the Fixing America’s Surface Transportation Act (FAST Act) Modernization Rule. The Rule becomes effective May 2, 2019. While most of the amendments in the final rule affect corporate filers and operating companies, the rule will have a significant impact on Investment Company filers.
28 March 2019
In March 2019, the SEC adopted final amendments to its rules which expand the XBRL tagging requirement to Form 8-K filings. And it’s not just for selected Form 8-K filings; it’s for all of them.
Form 8-K is the interim report that companies must file with the SEC to announce major events that shareholders should know about. Previously the Form 8-K did not have any XBRL structured data tagging required (with the exception of when a Form 8-K included restated financials that were originally filed with XBRL), but it will soon require the inclusion of computer-searchable XBRL tags. Regulators, registrants and investors will need to be aware of the changes to take advantage of, and comply with, the new requirement.
15 March 2019
The SEC has intertwined various XBRL tagging questions within the 46 questions asked in its Request for Comment on Earnings Releases and Quarterly Reports. The 46 questions focus on the two communications that U.S. companies utilize to disclose their quarterly financial information – the Form 10-Q and the earnings release. However, the SEC requires that only one of those documents, the Form 10-Q, be tagged with computer-readable XBRL. This creates a situation whereby various changes, as contemplated in the SEC request, will need to consider the implications to XBRL-tagged data and the increasing number of investors that rely on it.
26 February 2019
You think it could never happen to your company—until it does. In 2018, the SEC announced a startling discovery: nine publicly traded companies in the United States were duped by a simple e-mail scam and lost a total of almost $100 million, most of which was not recoverable. Pretending to be company executives issuing instructions or vendors requesting payments, cyberfraudsters tricked corporate employees into sending millions of dollars to the perpetrators’ bank accounts. According to the SEC’s investigative report (SEC Release No. 84429), some of the scams persisted for months. The fraud in several cases was detected only when the real vendors complained about nonpayment or when law enforcement intervened. Each of the nine companies lost at least $1 million; two lost more than $30 million.
15 February 2019
In 2018 the SEC adopted rule amendments that require operating companies to submit financial statements in a new reporting format - Inline XBRL. The requirements will be phased-in by company size from 2019 to 2021, as follows:
- Group 1: Large accelerated filers that use US GAAP (starting with fiscal periods ending on or after June 15, 2019)
- Group 2: Accelerated filers that use US GAAP (starting with fiscal periods ending on or after June 15, 2020)
- Group 3: All others - which includes all IFRS filers (starting with fiscal periods ending on or after June 15, 2021)
13 February 2019
The use of structured data, especially XBRL, is accelerating both in the capital markets and at the SEC. Public remarks from SEC commissioners and staff in recent years have clearly established the agency’s ongoing push to modernize all areas of financial disclosure through structured data—well beyond the SEC’s internal operations.
14 December 2018
Unlike some former presidents, Mr. Trump has taken a noticeable interest in SEC policy. In August, he asked the Commission to study switching corporate financial reporting to a biannual schedule in place of the current quarterly system. The president's favored means of communication—social media—is also a topic of concern for the SEC, as some CEOs pioneer the use of new channels of communication with investors.
To find out what market observers see as the best ways to address these matters, Mergermarket on behalf of Toppan Vintage spoke with four experts.
Toppan Vintage question: In August, President Trump contributed to the debate regarding the merits of quarterly vs biannual financial reporting. What benefits and drawbacks do you feel would accompany a switch to a biannual reporting period? Leading industry experts weigh in...