SEC staff provides transition guidance for new interim equity disclosures

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In brief , PwC US Sep 27, 2018

Check out the transition guidance for interim stockholders’ equity disclosures.

What happened?

As outlined in In brief 2018-22, Implementing the recently adopted SEC rules, the SEC recently amended its rules to require an analysis of changes in stockholders’ equity in the financial statements included in quarterly reports on Form 10-Q. The analysis, which can be presented as a note or separate statement, is required for the current and comparative quarter and year-to-date interim periods.

The amended rules will become effective 30 days after they are published 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 SEC’s Division of Corporation Finance issued a Compliance and Disclosure Interpretation related to Exchange Act Forms (CDI- Question 105.09) that provides transition guidance related to this disclosure requirement.

Why is this important?

The CDI states that the amendments are effective for all filings made on or after the effective date; however, it also states the SEC staff would not object if a filer’s first presentation of the changes in stockholders’ equity was included in its Form 10-Q for the quarter that begins after the effective date of the amendments. For example, if the amendments become effective on October 29, a calendar year-end filer could omit the new disclosure from its September 30, 2018 Form 10-Q. Similarly, a filer with a June 30 year end could omit this disclosure from its September 30, 2018 and December 31, 2018 Forms 10-Q. In both of these examples, the new disclosure would be presented for the first time in the March 31, 2019 Form 10-Q.

What's next?

As of September 27, the amendments have not been published in the Federal Register. Registrants should monitor when the new rules become effective and consider the impact on any SEC filings made on or after that date.

To have a deeper discussion, contact:

Wayne Carnall

Partner, National Professional Services Group, PwC US


Ryan Spencer

Partner, National Professional Services Group, PwC US


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David Schmid

David Schmid

International Accounting Leader, National Professional Services Group, PwC US

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