On The Horizon: CorpFin updates Non-GAAP Financial Measures C&DIs

Contents SEC     CorpFin updates Non-GAAP Financial Measures C&DIs

Comment letters issued

SEC CorpFin updates Non-GAAP Financial Measures C&DIs The Compliance and Disclosure Interpretations described below reflect the views of the SEC staff. They are not rules, regulations, or statements of the Commission and have not been approved by the Commission. The interpretations are intended as general guidance and should not be relied on as definitive.

The SEC’s Division of Corporation Finance (CorpFin) staff recently updated Section 101, Business Combination Transactions, of its Non-GAAP Financial Measures Compliance and Disclosure Interpretations (C&DIs). Previous Questions 101.01 and 101.02 were renumbered, and new Question 101.01 was added.

The new Question 101.01 explains that financial measures included in forecasts provided to a financial advisor and used in connection with a business combination are not considered non-GAAP financial measures if both of the following conditions are met:

  • The financial measures are included in forecasts provided to the financial advisor for the purpose of rendering an opinion that is materially related to the business combination transaction; and
  • The forecasts are being disclosed in order to comply with Item 1015 of Regulation M-A or requirements under state or foreign law, including case law, regarding disclosure of the financial advisor’s analyses or substantive work.

Comment letters issued On October 16, the firm issued a comment letter in response to the AICPA Professional Ethics Executive Committee’s exposure draft titled State and Local Government Entities.

The firm also issued a comment letter on October 18 in response to the FASB’s proposed ASU, Land Easement Practical Expedient for Transition to Topic 842.

© 2017 Grant Thornton LLP, U.S. member firm of Grant Thornton International Ltd. All rights reserved. This Grant Thornton LLP On the Horizon provides information and comments on current accounting and SEC reporting issues and developments. It is not a comprehensive analysis of the subject matter covered and is not intended to provide accounting or other advice or guidance with respect to the matters addressed in this publication. All relevant facts and circumstances, including the pertinent authoritative literature, need to be considered to arrive at conclusions that comply with matters addressed in this publication. For additional information on topics covered in this publication, contact a Grant Thornton client-service partner.