Welcome to the last half of March! For all of us with 90 day deadlines for our Form 10-K, it is getting close to time to file!
As you prepare for the final reviews of your Form 10-K we thought we would share a list of “Hot-Button Topics” to make sure they are addressed appropriately in your filing.
We developed this list while presenting on-site workshops with CPA firms, and think it may be valuable for all of us who are preparers too.
Here are the topics:
1. SAB 74 Disclosures (see Topic 11M in the codification at: http://www.sec.gov/interps/account/sabcode.htm) – make sure your SAB 74 Recent Accounting Pronouncement disclosure for new standards includes all four points from the SAB and addresses all material new standards for your company, including revenue recognition.
2. Cybersecurity – Most likely almost every company should have a risk factor for cybersecurity, but perhaps more disclosure is appropriate for your company. Be sure to check out Corp Fin Disclosure Topic 2 (at http://www.sec.gov/divisions/corpfin/guidance/cfguidance-topic2.htm).
3. Take time now to be sure that your webpage and such other public disclosures are consistent with 10-K, 10-Q etc. (E.g. segment discussions)
4. Segments are always a big deal. Check out the speech by OCA Deputy Chief Accountant Dan Murdock (at: http://www.sec.gov/News/Speech/Detail/Speech/1370543611034#.VQn1sGd0yUk). And, don’t’ forget the PACCAR enforcement action related in part related to segment disclosure (http://www.sec.gov/litigation/litreleases/2013/lr22711.htm).
5. Item 1 – S-K Item 101(a) – Big changes in “mode of conducting business”, even significant strategic changes, should be discussed.
6. Item 1 – S-K Item 101(c) – The description of the business must be by segment.
7. Review Item 1 discussion of distributions channels and methods etc. for consistency with Rev Rec Accounting.
8. Item 1A – For risk factors assure major risks from a manager’s perspective are included.
9. Item 2 – Relate to impairment risk and possible capex in future as applicable.
10. Item 3 – Not the same as the footnotes to f/S. More factual details, plaintiff suits etc.
11. MD&A – Quantification of changes is a major theme in SEC Comment Letters.
12. MD&A – Known trends – things that could make past not predictive of the future – No surprise stock drops!!
Hope all this helps, and if you have ideas for more topics, let us know!