Regulation S-K dictates financial reporting disclosures for SEC Forms S-1, 10-K, and 8-K. The changes the SEC wants to make cover the gamut of Reg S-K items, including, for example, Management’s Discussion and Analysis (Item 303). That item requires registrants to discuss their financial condition, changes in financial condition, and results of operations over the three-year period and to either use year-to-year comparisons or any other formats that in the registrant’s judgment would enhance a reader’s understanding.
One of the SEC’s proposed 303 amendments would be to eliminate the need to include the first of the three filing years if (1) that discussion isn’t material to an understanding of the registrant’s financial condition, changes in financial condition, and results of operations and (2) the registrant has filed its prior year Form 10-K55 on EDGAR containing MD&A of the earliest of the three years included in the financial statements of the current filing.
Scott H. Kimpel, a partner at Hunton & Williams LLP, who was a counsel to an SEC commissioner between 2009-2012, says, “Assuming the proposed amendments are ultimately adopted, preparers of financial statements will save some time and effort in drafting the MD&A by avoiding a rehash of old numbers. Users of financial statements will still have access to historical MD&A through the SEC’s EDGAR database.”