United States

New interim reporting requirement for changes in stockholders' equity


As part of its Disclosure Effectiveness Initiative, in August the SEC issued Release No. 33-10532, Disclosure Update and Simplification. This Release primarily eliminates certain disclosure requirements that have become redundant, outdated, overlapping or superseded, in light of other SEC disclosure requirements, U.S. generally accepted accounting principles, International Financial Reporting Standards or changes in the information environment. However, the Release also amends the interim financial statement requirements to require provision of the information required by Regulation S-X Rule 3-04 for the current and comparative year-to-date periods, with subtotals for each interim period.

Rule 3-04 requires an analysis of the changes in stockholders' equity and noncontrolling interests presented in the balance sheets to be presented in a note or in a separate statement. The analysis should be presented in the form of a reconciliation of the beginning and ending balances for each period for which a statement of comprehensive income is required to be filed with all significant reconciling items described by appropriate captions with contributions from and distributions to owners shown separately. Other requirements of Rule 3-04 include:

  • Separate disclosure of any adjustments made to the beginning balance of the earliest period presented for retroactive adjustments applied to periods prior to that period
  • Per share and aggregate amounts for any dividends for each class of shares
  • A separate schedule in the notes to the financial statements that shows the effects of any changes in the registrant’s ownership interest in a subsidiary on the equity attributable to the registrant

The Release is effective 30 days after publication in the Federal Register, so it is possible that the requirements of Rule 3-04 would be effective as of the filing dates for Form 10-Qs for periods ending on September 30, 2018.