{"id":1479,"date":"2019-03-28T16:34:27","date_gmt":"2019-03-28T20:34:27","guid":{"rendered":"https:\/\/seci.wpenginepowered.com\/?p=1479"},"modified":"2019-03-28T16:55:02","modified_gmt":"2019-03-28T20:55:02","slug":"the-details-and-implementation-steps-for-disclosure-modernization-and-simplification","status":"publish","type":"post","link":"https:\/\/seciblog.pli.edu\/index.php\/the-details-and-implementation-steps-for-disclosure-modernization-and-simplification\/","title":{"rendered":"The Details and Implementation Steps for Disclosure Modernization and Simplification"},"content":{"rendered":"<p>Here is a brief video overview of this post, hope you find it interesting!<\/p>\n<iframe src='\/\/player.vimeo.com\/video\/327144338?autoplay=0' width='425' height='344' frameborder='0' webkitallowfullscreen mozallowfullscreen allowfullscreen><\/iframe>\n<p>As you have likely heard on March 20, 2019, the SEC adopted a final rule for \u201c<a href=\"https:\/\/www.sec.gov\/rules\/final\/2019\/33-10618.pdf\">Disclosure Modernization and Simplification<\/a>\u201d as part of its responsibilities under the FAST Act.\u00a0 This new rule makes a number of detailed changes to reports on Form 10-K, 10-Q and, to a lesser extent, Form 8-K.\u00a0 The rule also makes several broad changes in areas such as incorporation by reference, obtaining confidential treatment and iXBRL tagging.<\/p>\n<p>As we did with the <a href=\"https:\/\/seciblog.pli.edu\/?p=1392\">August 2018 Disclosure Update and Simplification<\/a>\u00a0rule, we are going to do a series of posts to help manage these details and implement this new rule.<\/p>\n<p>To begin, in this post, to help see the big picture of the changes, we have a list of what is \u201cmodernized and simplified\u201d item-by-item in Forms 10-K and 10-Q.<\/p>\n<p>Next will be a series of posts that delve into the changes for each item.<\/p>\n<p>Last, after the final rule with any corrections or updates is published in the Federal Register, we will post a comprehensive \u201ccookbook\u201d to provide step-by-step guidance to implement the changes.<\/p>\n<p>To help organize our thoughts for implementation of this new rule, here is the item-by-item \u201cbig picture\u201d summary of all the periodic reporting changers in the Disclosure Modernization and Simplification rule:<\/p>\n<ol>\n<li>Cover page changes<\/li>\n<\/ol>\n<p style=\"padding-left: 60px;\">Both 10-Q and 10-K now include ticker symbol on the cover page.<\/p>\n<p style=\"padding-left: 60px;\">Elimination of the S-K 405 Section 16 delinquency reporting check box.<\/p>\n<p style=\"padding-left: 60px;\">Both 10-Q and 10-K cover pages must now be tagged for iXBRL (effective with the iXBRL rule).<\/p>\n<ol start=\"2\">\n<li>Item 1A \u2013 Risk Factors<\/li>\n<\/ol>\n<p style=\"padding-left: 60px;\">Risk factor guidance has been moved from S-K Item 503(c) to new Item 105.\u00a0The wording has been changed to remove examples.<\/p>\n<ol start=\"3\">\n<li>Item 2 \u2013 Properties<\/li>\n<\/ol>\n<p style=\"padding-left: 30px;\">\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0S-K Item 102 has been changed to focus on material information about<br \/>\nproperties.<\/p>\n<ol start=\"4\">\n<li>Item 7 \u2013 Management\u2019s Discussion and Analysis of Financial Condition and Results of Operations<\/li>\n<\/ol>\n<p style=\"padding-left: 60px;\">Regulation S-K Item 303 has been changed to allow companies that present three years of financial statements to omit the earliest year in MD&amp;A discussion.<\/p>\n<ol start=\"5\">\n<li>Item 10. Directors, Executive Officers and Corporate Governance.<\/li>\n<\/ol>\n<p style=\"padding-left: 60px;\">One minor change in S-K Item 401 to fix the instruction that permits omitting executive officer information from the proxy or other information statement if it is included in Part One of Form 10-K.<\/p>\n<p style=\"padding-left: 60px;\">Another minor change to S-K Item 405 to change the title of the section for delinquent Section 16 filers to \u201cDelinquent Section 16(a) Reports\u201d and encourage omitting this title if there are no delinquencies to report.<\/p>\n<ol start=\"6\">\n<li>Item 11. Executive Compensation.<\/li>\n<\/ol>\n<p style=\"padding-left: 60px;\">No changes (although there is one minor change to S-K Item 407(d) that may affect proxy disclosures, including some EGC disclosures).<\/p>\n<ol start=\"7\">\n<li>Item 15. Exhibits, Financial Statement Schedules.<\/li>\n<\/ol>\n<p style=\"padding-left: 60px;\">Changes for incorporation by reference, redacting of information with potential competitive harm, potential exclusion of schedules for exhibits, omission of information that would violate personal privacy considerations and other changes such as moving disclosures such as a description of the registrant\u2019s securities to an exhibit.<\/p>\n<p>With the changes listed above, our detailed posts will also include discussion of other changes, such as:<\/p>\n<p style=\"padding-left: 30px;\">The elimination of the 5-year time horizon for incorporation by reference from 34 Act reports that used to be in S-K Item 10(d).<\/p>\n<p style=\"padding-left: 30px;\">Changes to Rule 12b-23 dealing with incorporation by reference to clarify that incorporation by reference into the financial statements is generally not allowed.<\/p>\n<p style=\"padding-left: 30px;\">Several changes to S-K Item 501 and other prospectus related changes.<\/p>\n<p>As a final note, most significant SEC rule changes end up with an acronym or nickname as we discuss them.\u00a0Hence, last August\u2019s Disclosure Update and Simplification rule became known as \u201cDuster\u201d.\u00a0 So far, no consensus nickname for this new rule has emerged.\u00a0If you have a suggestion put it in a response to this post!<\/p>\n<p>As always, your thoughts, comments and nickname suggestions are welcome!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Here is a brief video overview of this post, hope you find it interesting! As you have likely heard on March 20, 2019, the SEC adopted a final rule for \u201cDisclosure Modernization and Simplification\u201d as part of its responsibilities under the FAST Act.\u00a0 This new rule makes a number of detailed changes to reports on &hellip; <a href=\"https:\/\/seciblog.pli.edu\/index.php\/the-details-and-implementation-steps-for-disclosure-modernization-and-simplification\/\" class=\"more-link\">Continue reading <span class=\"screen-reader-text\">The Details and Implementation Steps for Disclosure Modernization and Simplification<\/span> <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false},"categories":[242,1],"tags":[],"coauthors":[154],"class_list":["post-1479","post","type-post","status-publish","format-standard","hentry","category-reporting","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts\/1479","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/comments?post=1479"}],"version-history":[{"count":0,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts\/1479\/revisions"}],"wp:attachment":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/media?parent=1479"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/categories?post=1479"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/tags?post=1479"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/coauthors?post=1479"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}