Automotive: 2016 SEC comment letter trends

10/31/2016

Download: Automotive: 2016 SEC comment letter trends

Take a closer look at the latest automotive SEC comment letters and trends to prepare your end of year financial reports and high quality annual reports.

We are pleased to provide you with our annual publication on the trends in SEC staff comment letters specific to companies in the automotive industry. Over the past year, companies in our industry have been faced with a number of opportunities and challenges, including meeting tightening fuel efficiency and emissions requirements, increased use of technology to enhance the driver and passenger experiences, the continued impact of expansion in markets around the world and the longer term implications of “Brexit.” In addition, companies are focused on the uncertainty of the future structure of the industry and their business model as partnerships, alliances, and joint ventures are likely to become much more common as transportation shifts from a private ownership model towards a “mobility” model.

The financial reporting and disclosure arena is also changing with the effective dates of the new revenue and leasing standards quickly approaching and the SEC’s renewed public focus on SAB 74 disclosures relative to the implementation of these new standards and the growing focus on the use of non-GAAP financial measures. The current environment and the changes that are taking place will shape the future of the automotive industry, so companies should take the time to refresh their understanding of the SEC staff’s areas of focus when it comes to preparing high quality annual reports.

We have prepared this publication to assist you in identifying and understanding the SEC’s recent areas of focus specific to the automotive industry. The topic areas summarized in this publication are based on comment letters issued by the SEC staff to automotive companies and posted on the SEC’s EDGAR website from July 1, 2015 to June 30, 2016. We have provided relevant examples of recent comments in the topical areas where the industry has received the most comments to aid you in ensuring that your disclosures are robust and consistent with relevant accounting and reporting guidance and recent reporting trends. In some instances, we have included relevant examples from other industries, which may be applicable to automotive industry companies as well. We have also included an update and discussion of the SEC’s on-going disclosure effectiveness project and an overview of the SEC comment letter process and best practices.

We hope you find this summary to be a useful reference tool providing helpful insights into the SEC staff’s areas of focus, and we look forward to working with you through this financial reporting season. Please do not hesitate to reach out to your engagement team, the PwC contacts listed at the end of this publication, or the PwC Automotive team to discuss this information in more detail.

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