United States

Highlights of recent SEC Regulations Committee meeting


In a recent meeting of the Center for Audit Quality SEC Regulations Committee with SEC staff members, the following emerging financial reporting issues, among others, were discussed:

  • The SEC staff has considered certain registrant disclosures of non-GAAP financial measures to not be appropriate because they utilized individually tailored accounting principles. Registrants with questions regarding the appropriateness of non-GAAP financial measures should reach out to the Corporation Finance Office of the Chief Accountant.
  • Committee and SEC staff members discussed various transition issues for registrants with changes in emerging growth company status.
  • Issuers may contact the Corporation Finance Office of the Chief Accountant to discuss challenges in applying the Regulation S-K guidance for the contractual obligations table in light of the adoption of Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 842, Leases.
  • The SEC staff will object to a non-GAAP measure presented by a U.S. GAAP registrants that adjusts EBITDA to add back operating lease expense since it is not recorded as “depreciation” or “interest” under ASC 842.
  • Committee and SEC staff members discussed certain matters related to S-X Rule 3-05, Financial statements of businesses acquired or to be acquired.
  • Financial statement schedules specified by Regulation S-X Article 12 are required for the investee under S-X Rule 3-09, Separate financial statements of subsidiaries not consolidated and 50 percent or less owned persons.