SEC Proposes Updates to Regulation S-X Disclosure Rules for Acquisitions and Dispositions

SEC Proposes Updates to Regulation S-X Disclosure Rules for Acquisitions and Dispositions


By: Andrew B. Barkan, Lee T. Barnum, Daniel J. Bursky, Joshua T. Coleman, Mark S. Hayek, Meredith L. Mackey, Ezra Schneck, Joshua Wechsler, John Lawrence

The Securities and Exchange Commission (the “SEC”) recently issued a release proposing updates to the historical and pro forma financial statement disclosure requirements of Regulation S X relating to acquisitions and dispositions. In particular, the updates include changes to Rule 3-05 of Regulation S-X relating to the historical financial statements of acquired businesses and Article 11 of Regulation S-X relating to pro forma financial statements. The affected rules are most commonly triggered when a company registers securities or files a proxy statement with the SEC in connection with a corporate transaction, or when a Form 8-K is required to be filed with the SEC following the completion of a material acquisition or disposition. The SEC's proposal represents the latest step in a process that began when Congress passed the Fixing America's Surface Transportation Act in 2015, mandating that the SEC review its disclosure requirements for SEC registrants and update and streamline the requirements where possible, and reflects comments solicited by the SEC in September 2015.

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