What is the significant subsidiary test?
Currently, the asset test under Rule 1-02(w) measures whether the registrant’s and its other subsidiaries’ proportionate share of the total assets of the subsidiary exceeds 10% of the total assets of the registrant and its subsidiaries on a consolidated basis as of the end of the most recently completed fiscal year.
What is a significant subsidiary SEC?
(1) The term significant subsidiary means a subsidiary, including its subsidiaries, which meets any of the conditions in paragraph (w)(1)(i), (ii), or (iii) of this section; however if the registrant is a registered investment company or a business development company, the tested subsidiary meets any of the conditions …
What is Rule 3 05 Regulation SX?
Rule 3-05 of Regulation S-X, which generally requires a registrant to provide separate audited annual and unaudited interim pre-acquisition financial statements of an acquired or to be acquired business, and Rule 3-14 of Regulation S-X, which similarly requires a registrant to provide financial statements for acquired …
How many periods of audited financial statements does a company need to prepare for its initial registration?
Need only 2 most recent fiscal years and interim periods. The financial statement requirement of the acquirer applies to reporting and non-reporting companies. Pro forma information is required, if material. Financial statements of the target are required.
What is the difference between Regulation SK and Regulation SX?
Regulation S-K establishes reporting requirements for companies smaller than a certain size whereas Regulation S-X is directed toward companies larger than that size. Regulation S-K establishes reporting requirements for publicly held companies whereas Regulation S-X is directed toward private companies.
What are pro forma adjustments?
They are often used, for example, when expanding a business, such as when buying a branch or a factory: pro forma adjustments represent the effect of such change on the full-year results of the business as if the acquisition had already taken place at the beginning of the year, thus providing a basis for comparison for …
What do you need to know about SEC significance tests?
This rule, combined with rule 3-05, defines the guidance for how many years of statements are required and the associated filing deadlines. Prior to performing the significance tests, however, you need to understand what qualifies as a business according to the SEC so that you can determine whether these tests are relevant to your acquisition.
What are the amendments to SEC Rule 3-14?
The amendments will generally align Rule 3-14 of Regulation S-X relating to financial statements for acquired real estate operations with the above-described amendments to Rule 3-05 (where no unique industry considerations exist).
When does a registrant need to disclose a significant business?
When a registrant acquires a significant business, other than a real estate operation, Rule 3-05 historically has required disclosure of separate audited annual and unaudited interim pre-acquisition financial statements of that business if it is significant to the registrant (Rule 3-05 Financial Statements).
What kind of financial statements are required by the SEC?
The SEC requires that audited financial statements be provided for significant acquired businesses, as well as probable business acquisitions, in the Form 8-K (â8-Kâ).