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It’s hard to believe, but year-end is upon us! This means turning our attention to the annual reporting season and gearing up for the first few months of 2024 — rolling from the 10-K to the proxy statement and the first quarter 10-Q in rapid succession with zero breaks. And in this annual reporting season, public companies are tackling a host of new disclosure obligations.

Fortunately, the memos are rolling in — like these from Davis Polk, Debevoise, Gibson Dunn and Paul Hastings — with summaries of new requirements & Staff guidance and suggestions of prior year disclosures that are ripe for review. On new disclosure topics, you may want to reference this thorough list from the Paul Hastings memo:

For the fiscal year ending December 31, 2023, issuers should keep in mind the following pertinent matters, and flow any necessary changes in disclosure throughout their Form 10-K:

– Current geopolitical conditions, including the Israel-Hamas War, the ongoing Russia-Ukraine War and conflict between China and Taiwan;
– Effects of sustained high interest rates and inflation on the financial and capital markets and related implications on the issuer’s ability to borrow funds or refinance existing indebtedness;
– Choppiness in the capital markets and potential impacts on the issuer’s ability to raise funds in the public or private markets;
– Downgrading of the United States’ credit rating, and the issuer’s preparedness to manage the related political risk;
– Risks related to the upcoming U.S. presidential election;
– Lingering impacts of the turmoil in the banking and financial services sector;
– Continued evolution and use of machine learning and generative AI, including risks arising from insufficient human oversight of AI or a lack of controls and procedures monitoring the use of AI in day-to-day operations as well as from potential future competitive disadvantages related to a lack of investment in AI tools;
– Effects stemming from long-term reliance on hybrid work arrangements, including impacts on productivity and profitability, as well as on operating expenses and overhead costs and / or risks related to return to office programs, including their impact on workforce retention and issues stemming from non-compliance;
– Climate-related or natural disaster-related events like increases in the cost of insurance coverage for entities with operations in high fire, hurricane or flood risk areas;
– ESG-related matters, including the pending SEC rules on climate-related disclosures and the new International Financial Reporting Standards sustainability and climate-related disclosure standards;
– Effects of any potential federal government shutdown (if applicable); and
– Impacts on the issuer’s supply or distribution chains related to the above factors or otherwise.

Issuers should also consider industry-specific and geography-specific developments, for example:

– Issuers in the entertainment and media space should consider the impacts related to the recently resolved SAG-AFTRA and WGA strikes;
– Issuers in the transportation industry should consider the financial and other impacts stemming from the United Auto Workers strike and related salary increases;
– Issuers in the residential real estate space should consider the impacts of the challenging housing market;
– Issuers that do business in California should consider the potential effects of recently adopted Senate Bill 253, the Climate Corporate Data Accountability Act and Senate Bill 261, Greenhouse Gases: Climate-Related Financial Risk and the issuer’s ability to prepare the required disclosures; and
– Issuers in the banking industry should review their liquidity disclosures in their MD&A and their interest rate risk and sensitivity disclosures in their Quantitative and Qualitative Disclosures About Market Risk in light of the Division of Corporation Finance’s focus on these disclosures coming out of the bank failures earlier this year.

We’re posting these and other resources in our “Form 10-K” practice area.

– Meredith Ervine