10.26.2004
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Updates
The SEC release adopting the new Form 8-K rules (see our August 23, 2004 Update) also included revisions to Form 10-Q. Calendar-year companies preparing their first quarterly reports on Form 10-Q since the effectiveness of these new rules should be aware that the revisions have consequences relating to the voluntary reporting of information not otherwise required to be reported on Form 10-Q.
Amended Form-10-Q: Part II, Item 5. Other Information
Previously, Item 5(a) of Part II of Form 10-Q provided that the company "may, at its option, report under this item any information not previously included in a report on Form 8-K" with respect to information not otherwise required by Form 10-Q. The new Item 5(a) replaces optional reporting with a requirement that the company "must disclose under this item any information required to be disclosed in a report on Form 8-K . . . but not reported" [emphasis added]. A similar requirement for reporting missed Form 8-K filings is contained in new Item 9A of Part II of Form 10-K. The SEC also eliminated Item 6(b) of Part II of Form 10-Q, which previously required companies to state whether any reports on Form 8-K had been filed during the quarter.
For calendar-year companies, amended Form 10-Q is effective for the first time for their quarterly reports for the third quarter of 2004, which are due November 9, 2004 for accelerated filers, and November 15, 2004 for other companies.
| Practical Tip
Forego Item Designation for Voluntary Disclosures within Form 10–Q or Move Voluntary Disclosures to Form 8–K. Companies are left in a quandary about how to make voluntary disclosures that previously could be made in a Form 10-Q under Part II, Item 5(a). For example, many companies disclosed the existence of Rule 10b5-1 trading programs under Item 5(a) even though such disclosure is not required by either Form 8-K or Form 10-Q. Now, voluntary disclosure of such information under Item 5(a) might be viewed as a "late reporting confession" and picked up by reporting services as a missed Form 8-K. To prevent such misperceptions, companies may choose alternative methods of disclosure. For example, companies may:
Until the SEC clarifies its view on this, we suggest that companies seek advice of counsel regarding how best to report voluntary disclosures. |
Additional Information
You can find the full text of the SEC final rules amending Form 10-Q at http://www.sec.gov/rules/final/33-8400.htm. You can find discussion of other recent laws, regulations and rule proposals of interest to public companies on our website.
