July 22, 2022
Financial Reporting: Waiver Requests Down Post-Business Combination Amendments
Rule 3-13 of Regulation S-X gives the SEC authority to waive certain financial statement requirements that public companies would otherwise have to comply with. Historically, many of the requests for Rule 3-13 waivers were submitted by companies engaging in acquisitions and related to the SEC’s rules regarding acquired company financial statements. The SEC amended those rules in 2020 to lessen the burden on acquiring entities. According to this Thomson Reuters report, that has resulted in a decline in waiver requests:
“We have seen a decline in our waiver letter process over the last two years. And I would say that this is directly related to the rulemaking that the division did, specifically CorpFin OCA related to 3-05, 3-14 and pro formas, and article 11. I mean, it really addressed our common waivers we’ve received,” CorpFin Chief Accountant Lindsay McCord said at the 40th annual SEC Financial Reporting Institute Conference hosted by the University of Southern California (USC) on June 2, 2022.
The article also discusses the Staff’s recent tweaks to the Rule 3-13 waiver process intended to make it more efficient.
– John Jenkins