The Center for Audit Quality recently shared these notes from a June meeting with Staff from the Division of Corporation Finance and Office of the Chief Accountant. Among other things, the Staff weighed in on transition reporting and segment reporting, as well as pro forma requirements following a reverse merger or de-SPAC transaction. Here’s an excerpt on that piece:

In de-SPAC transactions or where a public shell company acquires a private operating company, a registrant is required to provide pro forma financial information reflecting the accounting for the acquisition in a proxy or registration statement (e.g., a Form S-4). After effectiveness of the registration statement, certain subsequent filings (such as a Super 8-K reporting the transaction or subsequent registration statements) may require the registrant to update its and the target’s financial statements to remain compliant with the applicable age of financial statement requirements in Regulation S-X.

The Committee asked the staff whether the pro forma financial information reflecting the acquisition should be updated for the most recently reported periods in the Super 8-K or subsequent registration statements even if the registrant believes the update would not be material. The staff clarified that if the registrant’s financial statements were required to be updated, the pro forma financial information must also be updated. The update is required regardless of any materiality assessment.

The Committee further inquired whether pro forma financial information presented for transactions other than the one described by the Committee (i.e., transaction specified in Rule 11-01 of Regulation S-X) must be updated when the financial statements used to prepare the pro forma financial statements are required to be updated. The staff confirmed that if the financial statements used to prepare pro forma financial information are required to be updated, the pro forma financial information must also be updated. The update is required regardless of any materiality assessment.

– Liz Dunshee