The Division of Corporation Finance issued guidance on preparing MD&A when a company has omitted a discussion of the earliest of the three years in a filing, pursuant to amended Reg S-K. The guidance establishes three new Compliance & Disclosure Interpretations of Reg S-K.
C&DIs 110.02, 110.03, 110.04
In 2019, as part of the FAST Act Modernization and Simplication of Regulation S-K, the SEC amended certain disclosure requirements and related rules and forms. Among the changes were revisions to Managemement’s Discussion and Analysis of financial condition and results of operations (Item 303) of Regulation S-K.
Revised Instruction 1 of Item 303(a) permits companies that file three years of financial statements to omit the earliest year’s discussion if it was already included in a prior filing and such information is not necessary to a reader’s understanding of the company’s financial condition. Companies that elect not to include a discussion of the earliest year must clearly identify where the omitted disclosure appears in a prior filing.
The Division of Corporation Finance issued three new C&DIs to provide guidance on the revised MD&A rules.