You may have noticed that there’s still no effective date for the new Disclosure Update and Simplification, which was adopted in August. (See this Cooley Alert.) The new amendments are scheduled to become effective 30 days after publication in the Federal Register, but at this point, the release has not been published. The reason for the delay is anyone’s guess. In the meantime, however, questions have arisen about when filers may be expected to comply with certain financial statement requirements in the new amendments for purposes of upcoming Forms 10-Q.
In that regard, the staff has just posted a new CDI that provides some relief. New Question 105.09 responds to a question regarding the timing of compliance with the new requirement to present changes in shareholders’ equity in the interim financial statements (either in a separate statement or footnote) in quarterly reports on Form 10-Q. (Reg S-X Rules 8-03(a)(5) and 10-01(a)(7)) In the CDI, the staff states that, although the amendments are effective for all filings made 30 days after publication in the Federal Register, in
“light of the anticipated timing of effectiveness of the amendments and expected proximity of effectiveness to the filing date for most filers’ quarterly reports, the staff would not object if the filer’s first presentation of the changes in shareholders’ equity is included in its Form 10-Q for the quarter that begins after the effective date of the amendments. For example, assuming an effective date of October 25, a December 31 fiscal year-end filer could omit this disclosure from its September 30, 2018 Form 10-Q. Likewise, a June 30 fiscal year-end filer could omit this disclosure from its September 30, 2018 and December 31, 2018 Forms 10-Q; however, the staff would object if it did not provide the disclosures in its March 31, 2019 Form 10-Q.” [Emphasis added.]
(But let’s not forget this statement from Chair Jay Clayton reminding us that all this staff guidance is non-binding and not enforceable, as discussed in this PubCo post).