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Financial Statement Requirements in US Securities Offerings

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Financial Statement Requirements in US Securities Offerings Financial Statement Requirements in US Securities Offerings What You Need to Know 2021 Edition FINANCIAL STATEMENT REQUIREMENTS IN US SECURITIES OFFERINGS: WHAT YOU NEED TO KNOW 2021 Edition Alexander F. Cohen Paul M. Dudek Joel H. Trotter Latham & Watkins LLP Jonathan R. Guthart Timothy D. Brown Erin L. McCloskey KPMG LLP February 2021 Alexander F. Cohen is a partner in the Washington, D.C. office of Latham & Watkins LLP; Paul M. Dudek is a partner in the Washington, D.C. office of Latham & Watkins LLP; and Joel H. Trotter is a partner in the Washington, D.C. office of Latham & Watkins LLP. Jonathan R. Guthart is a partner in the Department of Professional Practice of KPMG LLP and is located in the New York City office. Timothy D. Brown is a partner in the Department of Professional Practice of KPMG LLP and is located in the New York City office. Erin L. McCloskey is a partner in the Department of Professional Practice of KPMG LLP and is located in the New York City office. Any errors or omissions are, of course, solely the responsibility of the authors. The views and opinions are those of the authors and do not necessarily represent the views and opinions of Latham & Watkins LLP or KPMG LLP. © 2021 Latham & Watkins. All Rights Reserved. Latham & Watkins operates worldwide as a limited liability partnership organized under the laws of the State of Delaware (USA) with affiliated limited liability partnerships conducting the practice in France, Hong Kong, Italy, Singapore, and the United Kingdom and as an affiliated partnership conducting the practice in Japan. Latham & Watkins operates in South Korea as a Foreign Legal Consultant Office. Latham & Watkins works in cooperation with the Law Office of Salman M. Al-Sudairi in the Kingdom of Saudi Arabia. Under New York’s Code of Professional Responsibility, portions of this communication contain attorney advertising. Prior results do not guarantee a similar outcome. Results depend upon a variety of factors unique to each representation. Please direct all inquiries regarding our conduct under New York’s Disciplinary Rules to Latham & Watkins LLP, 1271 Avenue of the Americas, New York, NY 10020, Phone: +1.212.906.1200. © 2021 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. TABLE OF CONTENTS Introduction .................................................................................................................................................................................................................................................................................................. 1 The Basics...................................................................................................................................................................................................................................................................................................... 1 Background to Financial Statement Requirements ................................................................................................................................................... 1 What Financial Statements Must Be Included in Public Offerings? .................................................................................................. 1 What Financial Statements Must Be Included to Begin SEC Review? ....................................................................................... 4 When Does Financial Information Go “Stale”? ................................................................................................................................................................ 4 Staleness of Financial Statements ..................................................................................................................................................................................................... 5 When Do Financial Statements Go Stale in 2021? ................................................................................................................................................... 7 MD&A ........................................................................................................................................................................................................................................................................................ 7 Additional Financial Information for Certain Specific Situations ..................................................................................................................... 9 Recent and Probable Acquisitions ...................................................................................................................................................................................................... 9 Financial Statements Required in Connection With Acquisitions ..................................................................................................... 10 Pro Forma Financial Information ....................................................................................................................................................................................................... 12 Discontinued Operations and Other GAAP Retrospective Revisions ........................................................................................ 14 Guarantor Financial Statements ........................................................................................................................................................................................................ 15 Secured Offerings .................................................................................................................................................................................................................................................... 17 Investments Accounted for Under the Equity Method ....................................................................................................................................... 17 Segment Reporting ................................................................................................................................................................................................................................................ 18 Supplemental Schedules for Certain Transactions ................................................................................................................................................ 19 Industry Guides ........................................................................................................................................................................................................................................................... 19 Quantitative and Qualitative Disclosure About Market Risk ..................................................................................................................... 20 Some Related Issues................................................................................................................................................................................................................................................................ 21 Additional Financial Information That Is Typically Included ....................................................................................................................... 21 Non-GAAP Financial Measures .......................................................................................................................................................................................................... 21 Form 8-K Filing Requirements in Connection With Significant Acquisitions or Dispositions ................... 23 Internal Control Over Financial Reporting ........................................................................................................................................................................... 23 Interactive Data ........................................................................................................................................................................................................................................................... 24 Special Considerations in Rule 144A Transactions and for Foreign Private Issuers ................................................. 24 Rule 144A Transactions .................................................................................................................................................................................................................................. 24 Special Rules Applicable to Foreign Private Issuers and Acquired Foreign Businesses.............................. 25 Conclusion ...............................................................................................................................................................................................................................................................................................
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