Last November, the SEC finalized certain amendments that would eliminate selected financial data, two years of supplementary financial information, and MD&A provisions for the contractual obligations table and off-balance sheet disclosure, under certain circumstances, for SEC reports and registration statements.
Companies may now early adopt these amendments for filings made after the rulemaking’s effective date of February 9, 2021, as long as they provide disclosure responsive to the amended item in Regulation S-K in its entirety. Compliance is mandatory for the first fiscal year ending on or after August 9, 2021 (210 days after publication in the Federal Register).
Those companies considering early adoption should be aware that certain SEC commissioners opposed the amendments, and particularly elimination of the contractual obligations table, which they consider to be useful disclosure not presented elsewhere. The amendments may be repealed or adjusted under the Biden administration.
We have summarized the amendments, and the applicable sections of Regulation S-K, below. The amendments:
Clarify the MD&A objective, with emphasis on cash flow and forward-looking information (Item 303(a))
Eliminate certain disclosure:
Provide new flexibility to compare current quarter to either prior year period (ie, as is done currently) or to immediately preceding quarter (amended Item 303(c)(2)(ii))
Add or clarify certain disclosure: