The Accounting Policy & Practice Report ® provides financial accounting policy makers, advisors, and practitioners with the latest news, expert insights, and guidance on emerging, evolving,...
By Xing Gao
Foreign private issuers should pay close attention to Securities and Exchange Commission comment letter trends dealing with disclosure compliance, according to Mark Bergman, a Paul, Weiss, Rifkind, Wharton & Garrison LLP partner.
Knowing the common disclosure deficiencies and where SEC inspection is focusing would help foreign issuers improve their disclosures and resolve any issues with the SEC.
SEC comment letters are based on a company’s disclosures and other public information. A comment letter may indicate a deficiency in a company’s disclosures or an error in the company’s accounting. The topics that the SEC most frequently comments on are very similar for both foreign and domestic companies, according to SEC Deputy Chief Accountant Craig Olinger.
Olinger and Bergman spoke at a panel at the American Institute of CPA’s annual conference on current SEC and PCAOB developments, Dec. 6 in Washington.
Non-GAAP measures, management discussion and analysis (MD&A), fair value, segment reporting, revenue recognition, and business combinations are the topics at the top of the list. However, “you may see more comments for foreign issuers on issues related to the international financial reporting standards presentation,” Olinger said.
The first year of filing annual reports with the SEC “was all about getting it done,” according to Fiat Chrysler Automobiles NV controller Jon Nelson, also speaking at the conference. “The second year was about stabilizing. And then the third year we started to think about getting more efficient.”
Bergman said that foreign issuers should use the comment letter process to take a fresh look at what they need to disclose in order to better prepare their annual reports and disclosures.
Despite the regulatory challenges, Nelson said that the U.S. is still a very attractive market for foreign companies.
“The research and development and other resources are still attractive,” Nelson said. “It was easier for us to find accounting professionals with sufficient IFRS knowledge in Detroit than finding people with U.S. GAAP knowledge in other countries.”
Olinger went on to say that one of the goals for the SEC’s Division of Corporation Finance is to encourage more foreign private issuers to come to the U.S.
To contact the reporter on this story: Xing Gao in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: S. Ali Sartipzadeh at email@example.com
Copyright © 2017 Tax Management Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)