Interim reporting reminders Q1 2019

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Video , PwC US Mar 07, 2019

Watch our video on the Interim reporting reminders for Q1 2019.

We discuss helpful points to consider as preparers begin the quarterly reporting process for 2019. Topics include reminders regarding interim and annual disclosures, SEC Disclosure Simplification amendments effective for Q1, and items to keep in mind in light of the changing macroeconomic
and financial reporting environments.

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Duration: 3:07

Transcript

Hi, I'm Bonnie Bates, a senior manager in PwC's National office. As companies prepare for interim reporting, I’d like to provide you with some helpful points to consider.

First, interim footnote disclosures substantially duplicative of those in the audited financial statements may be omitted. Further, management’s discussion and analysis, or MD&A, is meant to enable the reader to assess material changes in financial condition from the end of the prior year to the date of the most recent balance sheet presented. Additionally, if critical accounting policies disclosures have been made in the MD&A for the preceding annual period, public companies are not required to repeat those disclosures in subsequent Form 10-Qs absent any material changes in these policies.

Having said that, US GAAP does require some interim and annual topics to be disclosed in the same manner. For example, with respect to contingencies, US GAAP requires disclosures to be repeated in interim and annual reports until the contingencies have been removed, resolved, or have become immaterial. In addition, PwC's Financial Statement Presentation Guide chapter 29 includes a table of general recurring interim and annual disclosure topics to consider in quarterly reporting.

Next, many public companies have been focused on the new leasing standard in preparation for adoption in Q1 2019. There are other standards that also require new disclosures for Q1. These include improvements to accounting for hedging activities and reclassifying certain tax effects from accumulated other comprehensive income. For new standards, interim and annual disclosures should be included in each of the company’s quarterly filings in the year of adoption.

Also for Q1, the SEC's disclosure simplification amendments became effective for public companies on November 5, 2018. As part of those amendments, public companies are now required to include an analysis of changes in stockholders’ equity for the current and comparative quarters and year-to-date interim periods. The SEC did not prescribe a specified format that must be followed to present the interim information about changes in stockholders' equity; however, the disclosure must be presented in the form of a reconciliation either as a separate statement or in the footnotes.

Lastly, public companies should be mindful of the changing macroeconomic and financial reporting environments and consider applicable impacts to updates in their filings. The SEC has focused on these areas in recent speeches and comment letters. Areas to consider for 2019 disclosures could include cybersecurity incidents, the phasing out of LIBOR, potential Brexit impacts and adoption of new accounting standards, among others.

For additional information on areas of focus at the SEC, check out PwC's new SEC Comment Letter trends tool on CFOdirect.com. The tool is refreshed quarterly and contains example comment letters on current topics. For more information, please refer to our financial statement presentation guide and our In brief, Implementing the recently adopted SEC rules on CFOdirect.com.

Thank you.

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Heather Horn

US Strategic Thought Leader, National Professional Services Group, PwC US

David Schmid

International Accounting Leader, National Professional Services Group, PwC US

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