TheCorporateCounsel.net

Recently, PwC published its latest analysis of Staff comment letters for the annual period ended June 30, 2024. The number of comment letters issued by the staff was down slightly overall as compared to the prior period, while the overall themes remained very much on par with years past. The PwC analysis presents sample comments in the following topic areas:

– Non-GAAP measures
– Management’s discussion and analysis
– Segment reporting
– Business combinations
– Revenue recognition
– Inventory and cost of sales
– Goodwill and other intangibles
– Debt, quasi-debt, warrants and equity
– Fair value measurement
– Disclosure controls and ICFR

In my experience, the most difficult comments to resolve with the Staff deal with non-GAAP financial measures that involve individually tailored accounting principles. The Staff has applied the individually tailored accounting principles guidance in an ever-widening range of circumstances, and issuers must often go several rounds with the Staff to address the comments, with the result often being that issuers must eliminate the measure.

Be sure to check out our “SEC Comment Process & Analysis” Practice Area and our “Non-GAAP Measures” Practice Area for the latest insights.

– Dave Lynn