Source: https://dart.deloitte.com/USDART/home/accounting/sec/rules-regulations/210-reg-s-x-edit/210-3-general-instructions-financial-statements
Timestamp: 2020-03-29 19:11:25
Document Index: 320495449

Matched Legal Cases: ['§ 240', '§ 210', '§ 210', '§ 249', '§ 240', '§\u2009230', '§\u2009240', '§\u2009210', '§ 210', '§ 249', '§ 210', '§ 239', '§ 239', '§ 239', '§ 240', '§ 239', '§ 239', '§ 239', '§\u2009210', '§\u2009210', '§\u2009210', '§ 249', '§ 210', '§ 210', '§ 210', '§ 210', '§ 210', '§ 210', '§ 249', '§ 240', '§ 249', '§ 210', '§ 249', '§ 210', '§ 210', '§ 210', '§ 210', '§ 249', '§ 249', '§ 249', '§ 249', '§ 210', '§ 210', '§ 249', '§\u2009210', '§ 210', '§ 210', '§ 210', '§ 210', '§ 210', '§ 230', '§\u2009249']

210.3 — General Instructions as to Financial Statements | DART – Deloitte Accounting Research Tool
210.3 — General Instructions as to Financial Statements
210.3-01 — Consolidated balance sheets.
(a) There shall be filed, for the registrant and its subsidiaries consolidated, audited balance sheets as of the end of each of the two most recent fiscal years. If the registrant has been in existence for less than one fiscal year, there shall be filed an audited balance sheet as of a date within 135 days of the date of filing the registration statement.
(b) If the filing, other than a filing on Form 10-K or Form 10, is made within 45 days after the end of the registrant's fiscal year and audited financial statements for the most recent fiscal year are not available, the balance sheets may be as of the end of the two preceding fiscal years and the filing shall include an additional balance sheet as of an interim date at least as current as the end of the registrant's third fiscal quarter of the most recently completed fiscal year.
(c) The instruction in paragraph (b) of this section is also applicable to filings, other than on Form 10-K or Form 10, made after 45 days but within the number of days of the end of the registrant's fiscal year specified in paragraph (i) of this section: Provided, that the following conditions are met:
(1) The registrant files annual, quarterly and other reports pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 and all reports due have been filed;
(2) For the most recent fiscal year for which audited financial statements are not yet available the registrant reasonably and in good faith expects to report income attributable to the registrant, after taxes; and
(3) For at least one of the two fiscal years immediately preceding the most recent fiscal year the registrant reported income attributable to the registrant, after taxes.
(d) For filings made after 45 days but within the number of days of the end of the registrant's fiscal year specified in paragraph (i) of this section where the conditions set forth in paragraph (c) of this section are not met, the filing must include the audited balance sheets required by paragraph (a) of this section.
(e) For filings made after the number of days specified in paragraph (i)(2) of this section, the filing shall also include a balance sheet as of an interim date within the following number of days of the date of filing:
(1) 130 days for large accelerated filers and accelerated filers (as defined in § 240.12b-2 of this chapter); and
(2) 135 days for all other registrants.
(f) Any interim balance sheet provided in accordance with the requirements of this section may be unaudited and need not be presented in greater detail than is required by § 210.10-01. Notwithstanding the requirements of this section, the most recent interim balance sheet included in a filing shall be at least as current as the most recent balance sheet filed with the Commission on Form 10-Q.
(g) For filings by registered management investment companies, the requirements of § 210.3-18 shall apply in lieu of the requirements of this section.
(h) Any foreign private issuer, other than a registered management investment company or an employee plan, may file the financial statements required by Item 8.A of Form 20-F (§ 249.220 of this chapter) in lieu of the financial statements specified in this rule.
(i)(1) For purposes of paragraphs (c) and (d) of this section, the number of days shall be:
(i) 129 days subsequent to the end of the registrant's most recent fiscal year for large accelerated filers and accelerated filers (as defined in § 240.12b-2 of this chapter); and
[45 FR 63687, Sept. 25, 1980, as amended at 46 FR 12491, Feb. 17, 1981; 46 FR 36124, July 14, 1981; 50 FR 49531, Dec. 3, 1985; 56 FR 30053, July 1, 1991; 64 FR 53908, Oct. 5, 1999; 67 FR 58503, Sept. 16, 2002; 68 FR 17880, Apr. 14, 2003; 69 FR 68235, Nov. 23, 2004; 70 FR 76640, Dec. 27, 2005; 73 FR 952, Jan. 4, 2008; 74 FR 18614, Apr. 23, 2009; 83 FR 50148, Oct. 4, 2018]
210.3-02 — Consolidated statements of comprehensive income and cash flows.
(a) There shall be filed, for the registrant and its subsidiaries consolidated and for its predecessors, audited statements of comprehensive income and cash flows for each of the three fiscal years preceding the date of the most recent audited balance sheet being filed or such shorter period as the registrant (including predecessors) has been in existence. A registrant that is an emerging growth company, as defined in § 230.405 of this chapter (Rule 405 of the Securities Act) or § 240.12b-2 of this chapter (Rule 12b-2 of the Exchange Act), may, in a Securities Act registration statement for the initial public offering of the emerging growth company's equity securities, provide audited statements of comprehensive income and cash flows for each of the two fiscal years preceding the date of the most recent audited balance sheet (or such shorter period as the registrant has been in existence).
(b) In addition, for any interim period between the latest audited balance sheet and the date of the most recent interim balance sheet being filed, and for the corresponding period of the preceding fiscal year, statements of comprehensive income and cash flows shall be provided. Such interim financial statements may be unaudited and need not be presented in greater detail than is required by § 210.10-01.
(c) For filings by registered management investment companies, the requirements of § 210.3-18 shall apply in lieu of the requirements of this section.
(d) Any foreign private issuer, other than a registered management investment company or an employee plan, may file the financial statements required by Item 8.A of Form 20-F (§ 249.220 of this chapter) in lieu of the financial statements specified in this rule.
[45 FR 63687, Sept. 25, 1980, as amended at 46 FR 12491, Feb. 17, 1981; 46 FR 36125, July 14, 1981; 50 FR 49531, Dec. 3, 1985; 56 FR 30053, July 1, 1991; 57 FR 45292, Oct. 1, 1992; 64 FR 53908, Oct. 5, 1999; 82 FR 17545, April 12, 2017; 83 FR 50148, Oct. 4, 2018]
210.3-03 — Instructions to statement of comprehensive income requirements.
(a) The statements required shall be prepared in compliance with the applicable requirements of this regulation.
(b) If the registrant is engaged primarily—
(1) In the generation, transmission or distribution of electricity, the manufacture, mixing, transmission or distribution of gas, the supplying or distribution of water, or the furnishing of telephone or telegraph service; or
(2) In holding securities of companies engaged in such businesses, it may at its option include statements of comprehensive income and cash flows (which may be unaudited) for the twelve-month period ending on the date of the most recent balance sheet being filed, in lieu of the statements of comprehensive income and cash flows for the interim periods specified.
(c) If a period or periods reported on include operations of a business prior to the date of acquisition, or for other reasons differ from reports previously issued for any period, the statements shall be reconciled as to sales or revenues and net income in the statement or in a note thereto with the amounts previously reported: Provided, however, That such reconciliations need not be made (1) if they have been made in filings with the Commission in prior years or (2) the financial statements which are being retroactively adjusted have not previously been filed with the Commission or otherwise made public.
(d) Any unaudited interim financial statements furnished shall reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. A statement to that effect shall be included. If all such adjustments are of a normal recurring nature, a statement to that effect shall be made; otherwise, there shall be furnished information describing in appropriate detail the nature and amount of any adjustments other than normal recurring adjustments entering into the determination of the results shown.
[45 FR 63687, Sept. 25, 1980. Redesignated at 47 FR 29836, July 9, 1982, and amended at 50 FR 25215, June 18, 1985; 50 FR 49532, Dec. 3, 1985; 57 FR 45292, Oct. 1, 1992; 64 FR 1734, Jan. 12, 1999; 83 FR 50148, Oct. 4, 2018]
210.3-04 — Changes in stockholders' equity and noncontrolling interests.
An analysis of the changes in each caption of stockholders' equity and noncontrolling interests presented in the balance sheets shall be given in a note or separate statement. This analysis shall be presented in the form of a reconciliation of the beginning balance to the ending balance for each period for which a statement of comprehensive income is required to be filed with all significant reconciling items described by appropriate captions with contributions from and distributions to owners shown separately. Also, state separately the adjustments to the balance at the beginning of the earliest period presented for items which were retroactively applied to periods prior to that period. With respect to any dividends, state the amount per share and in the aggregate for each class of shares. Provide a separate schedule in the notes to the financial statements that shows the effects of any changes in the registrant's ownership interest in a subsidiary on the equity attributable to the registrant.
[74 FR 18614, Apr. 23, 2009; as amended at 83 FR 50148, Oct. 4, 2018]
210.3-05 — Financial statements of businesses acquired or to be acquired.
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.13.2.1: Testing Acquired or to Be Acquired Businesses for Significance in the Preparation of an Initial Registration Statement
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.13.2.2: Financial Statements Used to Measure Significance of an Acquired or to Be Acquired Business in the Preparation of an Initial Registration Statement
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.13.2.3: Using Postacquisition Results to Satisfy the Audited Financial Statement Requirements for a Significant Acquired Business
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.13.2.4: Omitting an Audited Balance Sheet for a Significant Business Acquisition
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.13.3.1: Performing Tests of Significance for an Acquired or to Be Acquired Business in a Put-Together Transaction That Is Concurrent With an IPO
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.13.3.2: Financial Statements Used to Measure Significance of a Business Acquisition or Probable Business Acquisition After a Put-Together Transaction That Is Concurrent With an IPO
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.13.4: Applying SEC SAB Topic 1.J (SAB 80)
(a) Financial statements required. (1) Financial statements prepared and audited in accordance with this regulation should be furnished for the periods specified in paragraph (b) below if any of the following conditions exist:
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.10.1: Introduction to SEC Reporting Considerations for an Acquired or to Be Acquired Interest in a Joint Venture
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.10.2: Reporting Considerations for an Acquired or to Be Acquired Interest in a Joint Venture
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.10.3: Filing Requirements for an Acquired or to Be Acquired Interest in a Joint Venture
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.10.4: Financial Statements Used to Measure Significance, SignificanceThresholds, and Financial Statement Requirements for an Acquired or to Be Acquired Interest in a Joint Venture
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.10.5: Pro Forma Financial Statement Requirements for an Acquired Interest in a Joint Venture
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.10.6: Performing the Significance Tests for an Acquired or to Be Acquired Interest in a Joint Venture
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.2.1: Identifying a Probable Business Acquisition
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.2.2: Identifying a Probable Business Acquisition When Control Is Obtained Through an Event Other Than a Purchase Transaction
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.2.3: Requirements for an Acquired Business When Control Is Obtained Through an Event Other Than a Purchase Transaction
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.3.4: Disclosure Requirements for the Acquisition of Assets and Assumption of Liabilities That Does Not Meet the Definition of a Business for SEC Reporting Purposes
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.7.1: Introduction to SEC Reporting Considerations for Related Businesses Acquired or to Be Acquired
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.7.2: Definition of Related Businesses
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.7.4: Performing the Significance Tests for Related Businesses Acquired or to Be Acquired
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.7.5: Performing the Income Test of Significance for Related Businesses Acquired or to Be Acquired When One or More, but Not All, Related Businesses Have a Loss
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.7.7: Multiple Acquisitions or Probable Acquisitions of Related Businesses Over a Fiscal Year
Business Combinations Roadmap — SEC Reporting Considerations — Section1.7.6: Significance Thresholds and Financial Statement Requirements for Related Businesses Acquired or to Be Acquired for SEC Reporting Purposes
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.8.1: Introduction to SEC Reporting Considerations for an Acquisition or Probable Acquisition of an Additional Equity Interest in a Business
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.8.2: Filings Requiring Financial Statements of Businesses in Which Additional Equity Interests Are Acquired or Are to Be Acquired
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.8.3: Performing the Significance Tests for an Acquisition or Probable Acquisition of an Additional Equity Interest in a Business
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.8.4: Significance Thresholds and Financial Statement Requirements for an Acquisition or Probable Acquisition of an Additional Equity Interest in a Business
(b) Periods to be presented. (1) If securities are being registered to be offered to the security holders of the business to be acquired, the financial statements specified in §§ 210.3-01 and 210.3-02 shall be furnished for the business to be acquired, except as provided otherwise for filings on Form N-14, S-4 or F-4 (§ 239.23, § 239.25 or § 239.34 of this chapter). The financial statements covering fiscal years shall be audited except as provided in Item 14 of Schedule 14A (§ 240.14a-101 of this chapter) with respect to certain proxy statements or in registration statements filed on Forms N-14, S-4 or F-4 (§ 239.23, § 239.25 or § 239.34 of this chapter).
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.11.1: SEC Reporting Considerations Regarding Age of Financial Statements for an Acquired or to Be Acquired Business — General
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.11.3: Circumstances in Which a Registrant Would Be Required to Provide Financial Statements Updated Through the Acquisition Date for an Acquired Business
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.5.1: Form of Required Financial Statements When Selected Parts of an Entity Are Acquired
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.5.2: Understanding Abbreviated Financial Information
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.6.2: Financial Statement Disclosures — Materiality Under ASC 805 Versus Significance Under Rule 3-05
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.6.1: Significance Thresholds and Financial Statement Requirements for a Business Acquisition or Probable Business Acquisition for SEC Reporting Purposes
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.9.10: Substantial Majority of Individually Insignificant Businesses Acquired or to Be Acquired When One or More, but Not All, Businesses Have a Loss
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.9.1: Introduction to SEC Reporting Considerations for Individually Insignificant Businesses Acquired or to Be Acquired
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.9.2: Reporting Considerations for Individually Insignificant Businesses Acquired or to Be Acquired
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.9.3: Filings Requiring Financial Statements of Individually Insignificant Businesses Acquired or to Be Acquired
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.9.4: Financial Statements Used to Measure Significance for Individually Insignificant Businesses Acquired or to Be Acquired
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.9.5: Performing the Tests of Significance for Individually Insignificant Businesses Acquired or to Be Acquired
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.9.6: Performing the Income Test of Significance for Individually Insignificant Businesses Acquired or to Be Acquired When One or More, but Not All, Businesses Have a Loss
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.9.7: Period Over Which a Registrant Must Evaluate Individually Insignificant Businesses Acquired or to Be Acquired
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.9.8: Significance Thresholds and Financial Statement Requirements of Individually Insignificant Businesses Acquired or to Be Acquired
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.9.9: Substantial Majority of Individually Insignificant Businesses Acquired or to Be Acquired
(iv) If any of the conditions exceed 50 percent, the full financial statements specified in §§ 210.3-01 and 210.3-02 shall be furnished. However, financial statements for the earliest of the three fiscal years required may be omitted if net revenues reported by the acquired business in its most recent fiscal year are less than $100 million.
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.6.3.1: Measuring Significance of a Business Acquisition or Probable Business Acquisition
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.6.3.2: Measuring Significance of a Business Acquisition Consummated Shortly After a Registrant's Most Recently Completed Fiscal Year
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.6.3.3: Measuring Significance When a Registrant and an Acquired or to Be Acquired Business Have Different Fiscal Year-Ends
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.6.3.4: Measuring Significance When a Business Acquisition Is Consummated or a Probable Business Acquisition Is Contemplated by a Registrant's Subsidiary
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.6.3.5: Measuring Significance When a Business Acquisition Is Consummated or a Probable Business Acquisition Is Contemplated by a Shell Company After It Acquires a Predecessor
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.6.3.6: Measuring Significance of a Business Acquisition or Probable Business Acquisition When a Registrant Is a Successor to a Predecessor Company
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.6.3.7: Measuring Significance of an Acquired or to Be Acquired Business When Previously Issued Financial Statements Are Required to Be Retrospectively Adjusted
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.6.3.8: Measuring Significance When a Business Acquisition Is Consummated or a Probable Acquisition Is Contemplated After a Reverse Acquisition or a Reverse Recapitalization
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.6.3.9: Measuring Significance When a Registrant Plans to Dispose of Certain Assets Acquired or to Be Acquired
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.6.4: Use of Pro Forma Financial Information to Measure Significance When a Bus. Acquisition Is Consummated or a Probable Acquisition Is Contemplated and a Significant Bus. Acquisition or Disposition Has Been Reported Previously
(4) Financial statements required for the periods specified in paragraph (b)(2) of this section may be omitted to the extent specified as follows:
(iii) Separate financial statements of the acquired business need not be presented once the operating results of the acquired business have been reflected in the audited consolidated financial statements of the registrant for a complete fiscal year unless such financial statements have not been previously filed or unless the acquired business is of such significance to the registrant that omission of such financial statements would materially impair an investor's ability to understand the historical financial results of the registrant. For example, if, at the date of acquisition, the acquired business met at least one of the conditions in the definition of significant subsidiary in § 210.1-02 at the 80 percent level, the statements of comprehensive income of the acquired business should normally continue to be furnished for such periods prior to the purchase as may be necessary when added to the time for which audited statements of comprehensive income after the purchase are filed to cover the equivalent of the period specified in § 210.3-02.
(c) Financial statements of foreign business. If the business acquired or to be acquired is a foreign business, financial statements of the business meeting the requirements of Item 17 of Form 20-F (§ 249.220f of this chapter) will satisfy this section.
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.12.1: SEC Reporting Considerations for an Acquired or to Be Acquired Foreign Acquiree
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.12.2: SEC Reporting Considerations for an Acquired or to Be Acquired Foreign Business
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.12.3: Financial Statement Periods to Be Presented for an Acquired or to Be Acquired Foreign Business
[47 FR 29836, July 9, 1982, as amended at 50 FR 49532, Dec. 3, 1985; 51 FR 42056, Nov. 20, 1986; 59 FR 65636, Dec. 20, 1994; 61 FR 54514, Oct. 18, 1996; 73 FR 952, Jan. 4, 2008; 74 FR 18614, Apr. 23, 2009; 83 FR 31992, July 10, 2018; 83 FR 50148, Oct. 4, 2018]
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.4.1: Filings Requiring Financial Statements of a Significant Business Acquisition or Significant Probable Business Acquisition
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.4.2: Application of PCAOB Standards to Financial Statements Required in SEC Filings
210.3-06 — Financial statements covering a period of nine to twelve months.
(a) The issuer has changed its fiscal year;
(b) The issuer has made a significant business acquisition for which financial statements are required under § 210.3-05 of this chapter and the financial statements covering the interim period pertain to the business being acquired; or
(c) The Commission so permits pursuant to § 210.3-13 of this chapter.
210.3-07 — 210.3-08 — [Reserved]
210.3-09 — Separate financial statements of subsidiaries not consolidated and 50 percent or less owned persons.
(a) If any of the conditions set forth in § 210.1-02(w), substituting 20 percent for 10 percent in the tests used therein to determine a significant subsidiary, are met for a majority-owned subsidiary not consolidated by the registrant or by a subsidiary of the registrant, separate financial statements of such subsidiary shall be filed. Similarly, if either the first or third condition set forth in § 210.1-02(w), substituting 20 percent for 10 percent, is met by a 50 percent or less owned person accounted for by the equity method either by the registrant or a subsidiary of the registrant, separate financial statements of such 50 percent or less owned person shall be filed.
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 1.1.1: SEC Filings Requiring Separate Financial Statements, Summarized Financial Information, or Both, of Equity Method Investees
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 2.1.1: Significance Tests for Determining Reporting and Disclosure Requirements for Equity Method Investees
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 2.1.2: Significance Thresholds for Determining Reporting and Disclosure Requirements for Equity Method Investees
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 2.1.5: Testing Two or More Equity Method Investees for Significance Under Regulation S-X, Rule 3-09
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 2.1.6: Effect of Discontinued Operations or a Retrospectively Applied Change in Accounting Principle When Measuring Significance
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 2.2.1: Performing the Investment Test for Equity Method Investees Under Regulation S-X, Rule 3-09
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 2.4.1: Performing the Income Test for Equity Method Investees Under Regulation S-X, Rule 3-09
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 2.4.3: Determining a Registrant’s Share of the Income or Loss of the Equity Method Investee
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 2.4.4: Using Average Income When Performing the Income Test
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 2.4.5: Performing the Income Test When a Registrant or Equity Method Investee Has a Loss in the Fiscal Year
(b) Insofar as practicable, the separate financial statements required by this section shall be as of the same dates and for the same periods as the audited consolidated financial statements required by §§ 210.3-01 and 3-02. However, these separate financial statements are required to be audited only for those fiscal years in which either the first or third condition set forth in § 210.1-02(w), substituting 20 percent for 10 percent, is met. For purposes of a filing on Form 10-K (§ 249.310 of this chapter):
(1) If the registrant is an accelerated filer (as defined in § 240.12b-2 of this chapter) but the 50 percent or less owned person is not an accelerated filer, the required financial statements may be filed as an amendment to the report within 90 days, or within six months if the 50 percent or less owned person is a foreign business, after the end of the registrant's fiscal year.
(2) If the fiscal year of any 50 percent or less owned person ends within the registrant's number of filing days before the date of the filing, or if the fiscal year ends after the date of the filing, the required financial statements may be filed as an amendment to the report within the subsidiary's number of filing days, or within six months if the 50 percent or less owned person is a foreign business, after the end of such subsidiary's or person's fiscal year.
(3) The term registrant's number of filing days means:
(i) 60 days (75 days for fiscal years ending before December 15, 2006) if the registrant is a large accelerated filer;
(ii) 75 days if the registrant is an accelerated filer; and
(4) The term subsidiary's number of filing days means:
(i) 60 days (75 days for fiscal years ending before December 15, 2006) if the 50 percent or less owned person is a large accelerated filer;
(ii) 75 days if the 50 percent or less owned person is an accelerated filer; and
(iii) 90 days for all other 50 percent or less owned persons.
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 1.1.2: Form and Content of Separate Financial Statements of Equity Method Investees
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 1.2.1: Audit Requirements of Financial Statements for Equity Method
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 1.2.2: Independent Auditor Requirements of Financial Statements for Equity
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 1.4.2: Change From Consolidation to Equity Method of Accounting
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 1.4.3: Change From Consolidation to Cost Method of Accounting
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 1.4.4: Change From Equity Method of Accounting to Consolidation
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 1.4.5: Change From Equity Method of Accounting to Cost Method of Accounting
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 1.5.1: Due Date of Financial Statements for Equity Method Investees
(c) Notwithstanding the requirements for separate financial statements in paragraph (a) of this section, where financial statements of two or more majority-owned subsidiaries not consolidated are required, combined or consolidated statements of such subsidiaries may be filed subject to principles of inclusion and exclusion which clearly exhibit the financial position, cash flows and results of operations of the combined or consolidated group. Similarly, where financial statements of two or more 50 percent or less owned persons are required, combined or consolidated statements of such persons may be filed subject to the same principles of inclusion or exclusion referred to above.
(d) If the 50 percent or less owned person is a foreign business, financial statements of the business meeting the requirements of Item 17 of Form 20-F (§ 249.220f of this chapter) will satisfy this section.
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 1.1.3: Regulation S-X, Rule 3-09, and Lower-Tier Equity Method Investees
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 1.3.1: Interaction of Regulation S-X, Rule 3-05, With Rule 3-09
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 1.3.2: Interaction of Regulation S-X, Rules 3-10 and 3-16, With Regulation S-X, Rule 3-09
Equity Method Investees Roadmap — SEC Reporting Considerations — Section 1.4.1: Financial Statements Required for the Year of Acquisition or Disposition of a Significant Equity Method Investee
[46 FR 56179, Nov. 16, 1981, as amended at 47 FR 29837, July 9, 1982; 57 FR 45292, Oct. 1, 1992; 59 FR 65636, Dec. 20, 1994; 67 FR 58504, Sept. 16, 2002; 69 FR 68235, Nov. 23, 2004; 70 FR 76640, Dec. 27, 2005]
210.3-10 — Financial statements of guarantors and issuers of guaranteed securities registered or being registered.
Scope of Rule 3-10 (Q&A Regulation S-X: Rule 3-10-1)
Application of Rule 3-10 to Debt and Debtlike Securities (Q&A Regulation S-X: Rule 3-10-2)
Application of Rule 3-10 to Unregistered Securities (Q&A Regulation S-X: Rule 3-10-3)
Financial Statement Requirements of Issuers or Guarantors of Guaranteed Securities (Q&A Regulation S-X: Rule 3-10-4)
Audit Requirement for Financial Information of Subsidiary Issuers or Guarantors (Q&A Regulation S-X: Rule 3-10-5)
SEC Filings in Which Financial Information Is Required for Subsidiary Issuers or Guarantors of Guaranteed Securities (Q&A Regulation S-X: Rule 3-10-6)
Periods to Be Presented in the Subsidiary Issuer or Guarantor Financial Statements or the Condensed Consolidating Financial Information (Q&A Regulation S-X: Rule 3-10-7)
Application of Rule 3-10 in a Shelf Registration Statement When the Guarantor Structure Is Unknown (Q&A Regulation S-X: Rule 3-10-8)
Discontinuance of Reporting Under Rule 3-10 When a Subsidiary Issuer or Guarantor Terminates Its Registration or Suspends Filing Reports (Q&A Regulation S-X: Rule 3-10-9)
Date to Assess the Guarantor Structure for Compliance With Rule 3-10 (Q&A Regulation S-X: Rule 3-10-10)
Nonguarantor Subsidiary Becomes Greater Than Minor (Q&A Regulation S-X: Rule 3-10-11.1)
Changes in the Guarantor Structure Before the Balance Sheet Date (Q&A Regulation S-X: Rule 3-10-11.2)
Changes in the Guarantor Structure When the Registrant Files a Registration Statement (Q&A Regulation S-X: Rule 3-10-11.3)
Changes in the Guarantor Structure After the Balance Sheet Date but Before the Filing of the Periodic Report (Q&A Regulation S-X: Rule 3-10-11.4)
Introduction to the Exceptions to the General Rule in Regulation S-X, Rule 3-10 (Q&A Regulation S-X: Rule 3-10-12.1)
When Exceptions to the General Rule Are Not Met (Q&A Regulation S-X: Rule 3-10-12.2)
Election to Provide Full Financial Statements When an Exception Is Met (Q&A Regulation S-X: Rule 3-10-12.3)
Materiality of Information Presented in Compliance With Rule 3-10 (Q&A Regulation S-X: Rule 3-10-14)
Multiple Guarantor Structures (Q&A Regulation S-X: Rule 3-10-15)
(2) Operation of this rule. Paragraphs (b), (c), (d), (e) and (f) of this section are exceptions to the general rule of paragraph (a)(1) of this section. Only one of these paragraphs can apply to a single issuer or guarantor. Paragraph (g) of this section is a special rule for recently acquired issuers or guarantors that overrides each of these exceptions for a specific issuer or guarantor. Paragraph (h) of this section defines the following terms used in this section: 100% owned, full and unconditional, annual report, quarterly report, no independent assets or operations, minor, finance subsidiary and operating subsidiary. Paragraph (i) of this section states the requirements for preparing the condensed consolidating financial information required by paragraphs (c), (d), (e) and (f) of this section.
(3) Foreign private issuers. Where any provision of this section requires compliance with §§ 210.3-01 and 3-02, a foreign private issuer may comply by providing financial statements for the periods specified by Item 8.A of Form 20-F (§ 249.220f of this chapter).
Finance Subsidiary Issues Securities That Are Guaranteed by Its Parent Company (Q&A Regulation S-X: Rule 3-10(b)-1)
Parent Company as Co-Issuer of Debt Securities Under Rule 3-10(b) (Q&A Regulation S-X: Rule 3-10(b)-2)
(4) The parent company's financial statements are filed for the periods specified by §§ 210.3-01 and 210.3-02 and include a footnote stating that the issuer is a 100%-owned finance subsidiary of the parent company and the parent company has fully and unconditionally guaranteed the securities. The footnote also must include the narrative disclosures specified in paragraphs (i)(9) and (i)(10) of this section.
Operating Subsidiary Issues Securities That Are Guaranteed by Its Parent Company (Q&A Regulation S-X: Rule 3-10(c)-1)
Parent Company as Co-Issuer of Debt Securities Under Rule 3-10(c) (Q&A Regulation S-X: Rule 3-10(c)-2)
(4) The parent company's financial statements are filed for the periods specified by §§ 210.3-01 and 210.3-02 and include, in a footnote, condensed consolidating financial information for the same periods with a separate column for:
Subsidiary Issues Securities That Are Guaranteed by Its Parent Company and One or More Other Subsidiaries of That Parent Company (Q&A Regulation S-X: Rule 3-10(d)-1)
Parent Company as Co-Issuer of Debt Securities Under Rule 3-10(d) (Q&A Regulation S-X: Rule 3-10(d)-2)
Applicability of Rule 3-10(d) When a Subsidiary’s Guarantee Is Not Joint and Several (Q&A Regulation S-X: Rule 3-10(d)-3)
Filing Full Financial Statements for Guarantors That Are Not 100 Percent Owned or Whose Guarantee Is Not Full and Unconditional (Q&A Regulation S-X: Rule 3-10(d)-4)
Parent Company Issues Securities That Are Guaranteed by a Single Subsidiary (Q&A Regulation S-X: Rule 3-10(e)-1)
Parent Company as Co-Issuer of Debt Securities Under Rule 3-10(e) (Q&A Regulation S-X: Rule 3-10(e)-2)
(1) The subsidiary guarantor is 100% owned by the parent company issuer;
Parent Company Issues Securities That Are Guaranteed by Multiple Subsidiaries (Q&A Regulation S-X: Rule 3-10(f)-1)
Applicability of Rule 3-10(f) if Subsidiary Guarantees Are Not Joint and Several (Q&A Regulation S-X: Rule 3-10(f)-2)
Filing Full Financial Statements for Guarantors That Are Not 100 Percent Owned or Whose Guarantee Is Not Full and Unconditional (Q&A Regulation S-X: Rule 3-10(f)-3)
(g) Recently acquired subsidiary issuers or subsidiary guarantors. (1) The Securities Act registration statement of the parent company must include the financial statements specified in paragraph (g)(2) of this section for any subsidiary that otherwise meets the conditions in paragraph (c), (d), (e) or (f) of this section for omission of separate financial statements if:
(i) Audited financial statements for a subsidiary described in paragraph (g)(1) of this section must be filed for the subsidiary's most recent fiscal year preceding the acquisition. In addition, unaudited financial statements must be filed for any interim periods specified in §§ 210.3-01 and 210.3-02.
(ii) The financial statements must conform to the requirements of Regulation S-X (§§ 210.1-01 through 12-29), except that supporting schedules need not be filed. If the subsidiary is a foreign business, financial statements of the subsidiary meeting the requirements of Item 17 of Form 20-F (§ 249.220f) will satisfy this item.
Application of Rule 3-10(g) to Recently Acquired Subsidiary Issuers or Subsidiary Guarantors (Q&A Regulation S-X: Rule 3-10(g)-1)
Measuring Significance of Recently Acquired Subsidiary Issuers or Subsidiary Guarantors or of a Group of Related Subsidiary Issuers or Guarantors (Q&A Regulation S-X: Rule 3-10(g)-2)
SEC Filings Requiring Separate Financial Statements of Recently Acquired Subsidiary Issuers or Subsidiary Guarantors (Q&A Regulation S-X: Rule 3-10(g)-3)
Form and Content Requirements for the Separate Financial Statements of Recently Acquired Subsidiary Issuers or Guarantors in a Registration Statement (Q&A Regulation S-X: Rule 3-10(g)-4)
Interaction of Rule 3-10(g) and Rule 3-10(b)–(f) Requirements With Respect to Financial Statement Requirements of Recently Acquired Subsidiary Issuers or Guarantors (Q&A Regulation S-X: Rule 3-10(g)-5)
Application of PCAOB Standards to Financial Statements of a Recently Acquired Subsidiary Issuer or Subsidiary Guarantor (Q&A Regulation S-X: Rule 3-10(g)-6)
Application of Rule 3-10(g) to Nonguarantor Subsidiaries of an Acquired Company (Q&A Regulation S-X: Rule 3-10(g)-7)
Additional Considerations Regarding the Definition of “100 Percent Owned” (Q&As Regulation S-X: Rule 3-10(h)(1)-1, Rule 3-10(h)(1)-2, and Rule 3-10(h)(1)-3)
(3) Annual report refers to an annual report on Form 10-K or Form 20-F (§ 249.310 or § 249.220f of this chapter).
(4) Quarterly report refers to a quarterly report on Form 10-Q (§ 249.308a of this chapter).
Additional Considerations Regarding the Definition of “No Independent Assets or Operations” (Q&A Regulation S-X: Rule 3-10(h)(5)-1)
Additional Considerations Regarding the Definition of “Finance Subsidiary” (Q&A Regulation S-X: Rule 3-10(h)(7)-1)
(i) Instructions for preparation of condensed consolidating financial information required by paragraphs (c), (d), (e) and (f) of this section.
General Presentation Requirements for Condensed Consolidating Financial Information Under Rule 3-10 (Q&A Regulation S-X: Rule 3-10(i)-1)
Columnar Presentation of Condensed Consolidating Financial Information (Q&A Regulation S-X: Rule 3-10(i)-2)
Accounting Basis for Presenting Condensed Consolidating Financial Information (Q&A Regulation S-X: Rule 3-10(i)-4)
Equity Method of Accounting for Investments in Subsidiaries (Q&A Regulation S-X: Rule 3-10(i)-5)
Presentation of Minor Nonguarantor Subsidiaries in the Condensed Consolidating Financial Information (Q&A Regulation S-X: Rule 3-10(i)-6)
Presentation of Minor Guarantor Subsidiaries in the Condensed Consolidating Financial Information (Q&A Regulation S-X: Rule 3-10(i)-7)
Presentation of Joint and Several Liability Arrangements in the Condensed Consolidating Financial Information in SEC Registrant Filings (Q&A Regulation S-X: Rule 3-10(i)-9)
(1) Follow the general guidance in § 210.10-01 for the form and content for condensed financial statements and present the financial information in sufficient detail to allow investors to determine the assets, results of operations and cash flows of each of the consolidating groups;
(3) The parent company column should present investments in all subsidiaries based upon their proportionate share of the subsidiary's net assets;
(10) Provide the disclosures prescribed by § 210.4-08(e)(3) with respect to the subsidiary issuers and subsidiary guarantors;
(12) Where the parent company's consolidated financial statements are prepared on a comprehensive basis other than U.S. Generally Accepted Accounting Principles or International Financial Reporting Standards as issued by the International Accounting Standards Board, reconcile the information in each column to U.S. Generally Accepted Accounting Principles to the extent necessary to allow investors to evaluate the sufficiency of the guarantees. The reconciliation may be limited to the information specified by Item 17 of Form 20-F (§ 249.220f of this chapter). The reconciling information need not duplicate information included elsewhere in the reconciliation of the consolidated financial statements.
[65 FR 51707, Aug. 24, 2000, as amended at 73 FR 952, Jan. 4, 2008; 73 FR 1009, Jan. 4, 2008; 74 FR 18615, Apr. 23, 2009]
210.3-11 — Financial statements of an inactive registrant.
(b) The registrant has not purchased or sold any of its own stock, granted options therefor, or levied assessments upon outstanding stock,
210.3-12 — Age of financial statements at effective date of registration statement or at mailing date of proxy statement.
(a) If the financial statements in a filing are as of a date the number of days specified in paragraph (g) of this section or more before the date the filing is expected to become effective, or proposed mailing date in the case of a proxy statement, the financial statements shall be updated, except as specified in the following paragraphs, with a balance sheet as of an interim date within the number of days specified in paragraph (g) of this section and with statements of comprehensive income and cash flows for the interim period between the end of the most recent fiscal year and the date of the interim balance sheet provided and for the corresponding period of the preceding fiscal year. Such interim financial statements may be unaudited and need not be presented in greater detail than is required by § 210.10-01. Notwithstanding the above requirements, the most recent interim financial statements shall be at least as current as the most recent financial statements filed with the Commission on Form 10-Q.
[45 FR 62687, Sept. 25, 1980; as amended at 83 FR 50148, Oct. 4, 2018]
Business Combinations Roadmap — SEC Reporting Considerations — Section 1.11.2: SEC Reporting Considerations Regarding Age of Financial Statements for an Acquired or to Be Acquired Business in Registration or Proxy Statements
210.3-13 — Filing of other financial statements in certain cases.
210.3-14 — Special instructions for real estate operations to be acquired.
(a) If, during the period for which statements of comprehensive income are required, the registrant has acquired one or more properties which in the aggregate are significant, or since the date of the latest balance sheet required has acquired or proposes to acquire one or more properties which in the aggregate are significant, the following shall be furnished with respect to such properties:
(1) Audited income statements (not including earnings per unit) for the three most recent fiscal years, which shall exclude items not comparable to the proposed future operations of the property such as mortgage interest, leasehold rental, depreciation, corporate expenses and Federal and state income taxes: Provided, however, That such audited statements need be presented for only the most recent fiscal year if
(i) The property is not acquired from a related party;
(ii) Material factors considered by the registrant in assessing the property are described with specificity in the filing with regard to the property, including sources of revenue (including, but not limited to, competition in the rental market, comparative rents, occupancy rates) and expense (including, but not limited to, utility rates, ad valorem tax rates, maintenance expenses, capital improvements anticipated); and
(iii) The registrant indicates in the appropriate filing that, after reasonable inquiry, the registrant is not aware of any material factors relating to that specific property other than those discussed in response to paragraph (a)(1)(ii) of this section that would cause the reported financial information not to be necessarily indicative of future operating results.
(2) If the property is to be operated by the registrant, there shall be furnished a statement showing the estimated taxable operating results of the registrant based on the most recent twelve month period including such adjustments as can be factually supported. If the property is to be acquired subject to a net lease the estimated taxable operating results shall be based on the rent to be paid for the first year of the lease. In either case, the estimated amount of cash to be made available by operations shall be shown. There shall be stated in an introductory paragraph the principal assumptions which have been made in preparing the statements of estimated taxable operating results and cash to be made available by operations.
(3) If appropriate under the circumstances, there shall be given in tablular form for a limited number of years the estimated cash distribution per unit showing the portion thereof reportable as taxable income and the portion representing a return of capital together with an explanation of annual variations, if any. If taxable net income per unit will become greater than the cash available for distribution per unit, that fact and approximate year of occurrence shall be stated, if significant.
(b) Information required by this section is not required to be included in a filing on Form 10-K.
[45 FR 63687, Sept. 25, 1980, as amended at 47 FR 25122, June 10, 1982; 73 FR 953, Jan. 4, 2008; 83 FR 50148, Oct. 4, 2018]
210.3-15 — Special provisions as to real estate investment trusts.
(c) The tax status of distributions per unit shall be stated (e.g., ordinary income, capital gain, return of capital).
[45 FR 63687, Sept. 25, 1980, as amended at 50 FR 49532, Dec. 3, 1985; 83 FR 50148, Oct. 4, 2018]
210.3-16 — Financial statements of affiliates whose securities collateralize an issue registered or being registered.
Determining What Constitutes a “Substantial Portion of the Collateral” (Regulation S-X: Rule 3-16-1)
Condensed Consolidating Financial Information in the Context of Regulation S-X, Rules 3-10 and 3-16 (Q&A Regulation S-X: Rule 3-16-2)
[65 FR 51710, Aug. 24, 2000]
210.3-17 — Financial statements of natural persons.
(a) In lieu of the financial statements otherwise required, a natural person may file an unaudited balance sheet as of a date within 90 days of date of filing and unaudited statements of comprehensive income for each of the three most recent fiscal years.
(b) Financial statements conforming with the instructions as to financial statements of subsidiaries not consolidated and 50 percent or less owned persons under § 210.3-09(a) shall be separately presented for: (1) Each business owned as a sole proprietor, (2) each partnership, business trust, unincorporated association, or similar business organization of which the person holds a controlling interest and (3) each corporation of which the person, directly or indirectly, owns securities representing more than 50 percent of the voting power.
(c) Separate financial statements may be omitted, however, for each corporation, business trust, unincorporated association, or similar business organization if the person's total investment in such entity does not exceed 5 percent of his total assets and the person's total income from such entity does not exceed 5 percent of his gross income; Provided, that the person's aggregate investment in and income from all such omitted entities shall not exceed 15 percent of his total assets and gross income, respectively.
[46 FR 12491, Feb. 17, 1981, as amended at 50 FR 25215, June 18, 1985; 83 FR 50148, Oct. 4, 2018]
210.3-18 — Special provisions as to registered management investment companies and companies required to be registered as management investment companies.
(a) For filings by registered management investment companies, the following financial statements shall be filed:
(1) An audited balance sheet or statement of assets and liabilities as of the end of the most recent fiscal year;
(2) An audited statement of operations for the most recent fiscal year conforming to the requirements of § 210.6-07.
(3) An audited statement of cash flows for the most recent fiscal year if necessary to comply with generally accepted accounting principles. (Further references in this rule to the requirement for such statement are likewise applicable only to the extent that they are consistent with the requirements of generally accepted accounting principles.)
(4) Audited statements of changes in net assets conforming to the requirements of § 210.6-09 for the two most recent fiscal years.
(b) If the filing is made within 60 days after the end of the registrant's fiscal year and audited financial statements for the most recent fiscal year are not available, the balance sheet or statement of assets and liabilities may be as of the end of the preceding fiscal year and the filing shall include an additional balance sheet or statement of assets and liabilities as of an interim date within 245 days of the date of filing. In addition, the statements of operations and cash flows (if required by generally accepted accounting principles) shall be provided for the preceding fiscal year and the statement of changes in net assets shall be provided for the two preceding fiscal years and each of the statements shall be provided for the interim period between the end of the preceding fiscal year and the date of the most recent balance sheet or statement of assets and liabilities being filed. Financial statements for the corresponding period of the preceding fiscal year need not be provided.
(c) If the most current balance sheet or statement of assets and liabilities in a filing is as of a date 245 days or more prior to the date the filing is expected to become effective, the financial statements shall be updated with a balance sheet or statement of assets and liabilities as of an interim date within 245 days. In addition, the statements of operations, cash flows, and changes in net assets shall be provided for the interim period between the end of the most recent fiscal year for which a balance sheet or statement of assets and liabilities is presented and the date of the most recent interim balance sheet or statement of assets and liabilities filed.
(d) Interim financial statements provided in accordance with these requirements may be unaudited but shall be presented in the same detail as required by §§ 210.6-01 to 210.6-10. When unaudited financial statements are presented in a registration statement, they shall include the statement required by § 210.3-03(d).
210.3-19 — [Reserved]
210.3-20 — Currency for financial statements.
(a)(1) A foreign private issuer, as defined in § 230.405 of this chapter, shall state amounts in its primary financial statements in the currency which it deems appropriate.
(2) An issuer that is not a foreign private issuer shall present its financial statements in U.S. dollars.
(b)(1) The currency in which amounts in the financial statements are stated shall be disclosed prominently on the face of the financial statements. If dividends on publicly-held equity securities will be declared in a currency other than the reporting currency, a note to the financial statements shall identify that currency. If there are material exchange restrictions or controls relating to the issuer's reporting currency, the currency of the issuer's domicile, or the currency in which the issuer will pay dividends, prominent disclosure of this fact shall be made in the financial statements. If the reporting currency is not the U.S. dollar, dollar-equivalent financial statements or convenience translations shall not be presented, except a translation may be presented of the most recent fiscal year and any subsequent interim period presented using the exchange rate as of the most recent balance sheet included in the filing, except that a rate as of the most recent practicable date shall be used if materially different.
(2) If there are material exchange restrictions or controls relating to the currency of a subsidiary's domicile, the currency held by a subsidiary, or the currency in which a subsidiary will pay dividends or transfer funds to the issuer or other subsidiaries, prominent disclosure of this fact shall be made in the financial statements.
(c) If the financial statements of a foreign private issuer are stated in a currency of a country that has experienced cumulative inflationary effects exceeding a total of 100 percent over the most recent three year period, and have not been recast or otherwise supplemented to include information on a historical cost/constant currency or current cost basis prescribed or permitted by appropriate authoritative standards, the issuer shall present supplementary information to quantify the effects of changing prices upon its financial position and results of operations.
(d) Notwithstanding the currency used for reporting purposes, the issuer shall measure separately its own transactions, and those of each of its material operations (e.g., branches, divisions, subsidiaries, joint ventures, and similar entities) that is included in the issuer's consolidated financial statements and not located in a hyperinflationary environment, using the particular currency of the primary economic environment in which the issuer or the operation conducts its business. Assets and liabilities so determined shall be translated into the reporting currency at the exchange rate at the balance sheet date; all revenues, expenses, gains, and losses shall be translated at the exchange rate existing at the time of the transaction or, if appropriate, a weighted average of the exchange rates during the period; and all translation effects of exchange rate changes shall be included as a separate component (“cumulative translation adjustment”) of shareholder's equity. For purposes of this paragraph, the currency of an operation's primary economic environment is normally the currency in which cash is primarily generated and expended; a hyperinflationary environment is one that has cumulative inflation of approximately 100% or more over the most recent three year period. Departures from the methodology presented in this paragraph shall be quantified pursuant to Item 17(c)(2) of Form 20-F (§ 249.220f of this chapter).
(e) The issuer shall state its primary financial statements in the same currency for all periods for which financial information is presented. If the financial statements are stated in a currency that is different from that used in financial statements previously filed with the Commission, the issuer shall recast its financial statements as if the newly adopted currency had been used since at least the earliest period presented in the filing. The decision to change and the reason for the change in the reporting currency shall be disclosed in a note to the financial statements in the period in which the change occurs.
[59 FR 65631, Dec. 20, 1994, as amended at 64 FR 53908, Oct. 5, 1999; 83 FR 50148, Oct. 4, 2018]