Source: https://www.federalregister.gov/documents/2009/04/23/E9-9089/technical-amendments-to-rules-forms-schedules-and-codification-of-financial-reporting-policies
Timestamp: 2018-03-21 15:41:28
Document Index: 377202051

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Federal Register :: Technical Amendments to Rules, Forms, Schedules, and Codification of Financial Reporting Policies
A Rule by the Securities and Exchange Commission on 04/23/2009
18611-18619 (9 pages)
Release Nos. 33-9026
34-59775
II. Business Combinations
III. Noncontrolling Interests in Consolidated Financial Statements
IV. Summary of Amendments
VI. Consideration of Competitive Effects of Amendments
List of Subjects in 17 CFR Parts 210, 211, 229, 239, 240, and 249
https://www.federalregister.gov/d/E9-9089 https://www.federalregister.gov/d/E9-9089
Start Preamble Start Printed Page 18612
The Securities and Exchange Commission (“Commission”) is adopting technical amendments to various rules, forms and schedules under the Securities Act of 1933 (“Securities Act”) and the Securities Exchange Act of 1934 (“Exchange Act”). The Commission also is making certain technical changes to the Codification of Financial Reporting Policies (“CFRP”). These revisions are necessary to conform those rules, forms, schedules and the CFRP to two recently issued Statements of Financial Accounting Standards (“SFAS”) issued by the Financial Accounting Standards Board (“FASB”). SFAS 141 (revised 2007), Business Combinations, and SFAS 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 (collectively “Statements”) were both issued in December 2007. The technical amendments include revision of certain rules in Regulation S-X, certain items in Regulation S-K, certain sections in the CFRP and various forms and schedules prescribed under the Securities Act and Exchange Act.
Steven C. Jacobs, Associate Chief Accountant, at (202) 551-3400, Division of Corporation Finance, or Eric C. West, Associate Chief Accountant, at (202) 551-5300, Office of the Chief Accountant, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-3628.
We are adopting amendments to Regulation S-X,[1] Regulation S-K,[2] rules, forms and schedules under the Securities Act of 1933 [3] and the Securities Exchange Act of 1934 [4] and making technical changes to the CFRP. In Regulation S-X, we are adopting amendments to Rules 1-02, 3-01, 3-04, 3-05, 3-10, 3A-02, 4-08, 5-02, 5-03, 5-04, 7-03, 7-04, 7-05, 8-03, 8-04, 8-08, 9-03, 9-04, 9-06, 10-01, 11-01, and 11-02.[5] In Regulation S-K, we are adopting amendments to Items 301, 302, 305, and 503.[6] We are making technical changes to CFRP sections 201.01, 201.02, 213.02(b), and 507.03. We are amending Exchange Act Rule 12b-2.[7] We are amending Securities Act Forms S-3, S-4, F-3, and 1-A.[8] We are amending Exchange Act Schedule 14A.[9] Finally, we are amending Exchange Act Form 20-F.[10]
On April 25, 2003, the Commission issued a policy statement recognizing the FASB's financial accounting and reporting standards as “generally accepted” for purposes of the Federal securities laws.[11] The Commission's rules and regulations generally require compliance with U.S. generally accepted accounting principles (“GAAP”),[12] and the requirements of the Commission's rules, forms and schedules generally are used to interpret, supplement, or expand upon GAAP requirements. The purpose of these technical amendments and revisions is to eliminate obsolete terminology and revise reporting and disclosure requirements as necessary to achieve consistency between the Commission's compliance requirements and SFAS 141(R) and SFAS 160, both issued by the FASB in December 2007.
The FASB issued SFAS 141(R), Business Combinations, in December 2007. SFAS 141(R) is effective at the beginning of the first annual reporting period beginning on or after December 15, 2008. SFAS 141(R) addresses the accounting for all transactions in which an enterprise obtains control of one or more other businesses. The new standard retains the fundamental requirement in SFAS 141 that the acquisition method of accounting (called the “purchase method” in SFAS 141) be used for all business combinations. The existing requirement that an acquirer be identified for each business combination also was not modified. SFAS 141(R) defines the acquirer as the enterprise that obtains control of one or more businesses and establishes the acquisition date as the date control is achieved. The application of SFAS 141 was limited to business combinations in which control was obtained by transfer of consideration. SFAS 141(R) requires that the acquisition method of accounting be applied to all transactions and other events in which one entity obtains control over one or more businesses. In addition, SFAS 141(R) generally requires an acquirer to recognize assets acquired, liabilities assumed and any noncontrolling interest in the acquiree at their fair values as of the acquisition date (rather than the announcement date as required in SFAS 141). SFAS 141(R) also makes significant changes in accounting for contingencies, goodwill, bargain purchases and income taxes related to business combinations.
The FASB issued SFAS 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB 51, in December 2007. SFAS 160 is effective for fiscal years and interim periods within those fiscal years beginning on or after December 15, 2008. SFAS 160 amends ARB 51 [13] to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It specifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Prior to the advent of SFAS 160, little guidance existed for reporting noncontrolling interests. As a result, there were widely divergent practices for reporting such outside interests.
Most significantly, SFAS 160 changes the way the consolidated income statement is presented. It requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. In this regard, it requires disclosure on the face of the consolidated statement of income of the consolidated net income attributable to the parent and to the noncontrolling interest. Further, SFAS 160 establishes that all changes in a parent's ownership interest in a subsidiary shall be accounted for as equity transactions as Start Printed Page 18613long as the parent retains a controlling financial interest in the subsidiary. In addition, SFAS 160 requires that a parent recognize a gain or loss when a subsidiary is deconsolidated. Finally, SFAS 160 significantly expands disclosures in the consolidated financial statements regarding the interests of the parent's owners and the interests of noncontrolling owners.
The table which follows is presented as a guide to assist the reader in understanding the various changes being made by the technical amendments that are described at the end of this release. The table presents a brief description of each category of the changes and an explanation of the rationale for each change. Conforming amendments are being made to update the CFRP.
Amend various rules in Regulation S-X, items in Regulation S-K, and forms and schedules filed under the Securities Act and the Exchange Act to replace references to “minority interests” with “noncontrolling interests.” These amendments will replace references to “minority interests” with “noncontrolling interests” in order to be consistent with SFAS 160.
Under Regulation S-X, delete paragraphs 12 of Rule 5-03, 10 of Rule 7-04, and 14(e) of Rule 9-04 SFAS 160 requires that consolidated financial statements report the net income attributable to the parent (or controlling interest) and the net income attributable to the noncontrolling interest. These amendments will make the rules consistent with this requirement.
Under Regulation S-X, delete paragraphs 27 of Rule 5-02, 20 of Rule 7-03, and 18 of Rule 9-03 SFAS 160 requires that noncontrolling interests be presented in the consolidated statement of financial position within the equity section separate from the parent's equity. These amendments will eliminate the Commission's current requirement to present equity attributable to the noncontrolling interest outside of the consolidated equity section.
Amend various rules in Regulation S-X, items in Regulation S-K, and forms and schedules filed under the Securities Act and the Exchange Act to rescind guidance related to business combinations accounted for as “pooling of interests” and update references to specify which rules apply to combinations of entities under common control These amendments will eliminate “pooling of interests” accounting by registrants in accordance with the requirements of SFAS 141(R).
Amend various rules in Regulation S-X, items in Regulation S-K, and forms and schedules filed under the Securities Act and the Exchange Act to distinguish between income attributable to a noncontrolling interest and income attributable to a controlling interest SFAS 160 requires net income or loss be attributed to the parent (or controlling interest) and the noncontrolling interest. These amendments will make the rules consistent with this requirement.
Amend various rules in Regulation S-X, items in Regulation S-K, and forms and schedules filed under the Securities Act and the Exchange Act to remove the term “purchase method.” Under SFAS 141(R), a business combination can occur in the absence of a purchase transaction. These amendments will update the terminology in order to achieve consistency with SFAS 141(R).
Amend Rule 3-04 under Regulation S-X to require 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 to the equity attributable to the registrant This amendment will conform Rule 3-04 to the requirements of SFAS 160.
Under the Administrative Procedure Act, a notice of proposed rulemaking is not required when the agency, for good cause, finds that notice and public comment are impracticable, unnecessary, or contrary to the public interest.[14] These amendments are technical changes to eliminate obsolete terminology and revise reporting and disclosure requirements as necessary to achieve consistency between the Commission's compliance requirements and SFAS 141(R) and SFAS 160. Because no one is likely to want to comment on such non-substantive, technical amendments, the Commission finds that it is unnecessary to publish notice of these amendments.[15]
The Administrative Procedure Act also requires publication of a rule at least 30 days before its effective date unless the agency finds otherwise for good cause.[16] Due to the need to coordinate the effectiveness of the amendments with the effective dates of SFAS 141(R) and SFAS 160 and for the same reasons described with respect to opportunity for notice and comment, the Commission finds there is good cause for the amendments to take effect on April 23, 2009.
Section 23(a)(2) of the Exchange Act requires the Commission, in adopting rules under the Exchange Act, to consider the competitive effects of such rules, if any, and to refrain from adopting a rule that would impose a burden on competition not necessary or appropriate in furtherance of the purposes of the Exchange Act.[17] Because these amendments merely make technical changes to update references to applicable FASB pronouncements, we do not anticipate any competitive advantages or disadvantages will be created.
The Commission amends the “Codification of Financial Reporting Policies” announced in Financial Reporting Release 1 (April 15, 1982) [47 FR 21028] as follows:
1. By removing and reserving Sections 201.01 and 201.02.
2. By revising Section 213.02(b) to replace the term “minority interest” in each place it appears with the term “noncontrolling interest”.
3. By revising Section 507.03 to replace the term “minority interest” in each place it appears with the term “noncontrolling interest”.Start Printed Page 18614
The CFRP is a separate publication issued by the Commission. It will not be published in the Federal Register or Code of Federal Regulations. For more information about the CFRP, contact the Commission's Public Reference Room at (202) 551-5850.
We are adopting these technical amendments pursuant to Sections 6, 7, 10 and 19(a) of the Securities Act,[18] and Sections 12, 13, 14(a), 15(d) and 23(a) of the Exchange Act.[19]
2. Amend § 210.1-02 by revising paragraphs (w)(1) and (w)(3), the Computational Notes 1 and 2 following the Note to paragraph (w), (bb)(1)(i) and (bb)(1)(ii) to read as follows:
Computational note: * * *
(i) Current assets, noncurrent assets, current liabilities, noncurrent liabilities, and, when applicable, redeemable preferred stocks (see § 210.5-02.27) and noncontrolling interests (for specialized industries in which classified balance sheets are normally not presented, information shall be provided as to the nature and amount of the majority components of assets and liabilities);
3. Amend § 210.3-01 by revising paragraphs (c)(2) and (c)(3) to read as follows:
4. Revise § 210.3-04 to read as follows:
§ 210.3-04
5. In § 210.3-05, revise paragraphs (a)(1)(i) and (a)(1)(ii), and remove the authority citation at the end of the section to read as follows:
§ 210.3-05
(i) A business combination has occurred or is probable (for purposes of this section, this encompasses the acquisition of an interest in a business accounted for by the equity method); orStart Printed Page 18615
6. Amend § 210.3-10 by revising paragraph (i)(3) to read as follows:
§ 210.3A-02
7. Amend § 210.3A-02 by:
a. Revising paragraph (a), third sentence, the phrase “or in bankruptcy, or when control is likely to be temporary).” to read “or in bankruptcy).”; and
b. Revising paragraph (b)(2), first sentence, the reference “
8. In § 210.4-08, in the last sentence of paragraph (e)(3) introductory text, remove the phrase “(§ 210.5-02.28) and minority interests” and add in its place the phrase “(§ 210.5-02.27) and noncontrolling interests”.
9. Amend § 210.5-02 by:
a. Removing the undesignated heading “
b. Removing paragraph 27;
c. Redesignating paragraphs 28, 29, 30, and 31 as paragraphs 27, 28, 29, and 30;
d. Revising the reference “§ 210.5-02.29” in newly redesignated paragraph 27, last sentence, to read “§ 210.5-02.28”;
e. Adding an undesignated heading following newly redesignated paragraph 30 and a new paragraph 31; and
f. Revising paragraph 32.
g. Remove the authority citation at the end of the section.
§ 210.5-02
10. Amend § 210.5-03 by:
a. Removing paragraph 12 and redesignating paragraphs 13, 14, 15, 16, 17, 18, and 19 as paragraphs 12, 13, 14, 15, 16, 17, and 18;
b. Redesignating paragraph 20 as paragraph 21; and
c. Adding new paragraphs 19 and 20.
§ 210.5-03
§ 210.5-04
11. Amend § 210.5-04, Schedule I, last sentence, by revising the phrase “(§ 210.5-02.28) and minority interests” to read “(§ 210.5-02.27) and noncontrolling interests”.
12. Remove the authority citation for §§ 210.7-01 through 210.7-05 following the undesignated heading “Insurance Companies”.
13. Amend § 210.7-03 by:
a. Removing the undesignated heading “Minority Interests” preceding paragraph 20;
b. Removing paragraph 20;
c. Redesignating paragraphs 21, 22, 23, and 24 as paragraphs 20, 21, 22, and 23;
d. Revising newly redesignated paragraphs 20, 21, 22, and 23(b);
e. Adding an undesignated heading following newly redesignated paragraph 23(c) and a new paragraph 24; and
f. Revising paragraph 25.
§ 210.7-03
20. Preferred stocks subject to mandatory redemption requirements or whose redemption is outside the control of the issuer. The classification and disclosure requirements of § 210.5-02.27 shall be followed.
21. Preferred stocks which are not redeemable or are redeemable solely at the option of the issuer. The classification and disclosure requirements of § 210.5-02.28 shall be followed.
22. Common stocks. The classification and disclosure requirements of § 210.5-02.29 shall be followed.
(b) The classification and disclosure requirements of § 210.5-02.30(b) shall be followed for dating and effect of a quasi-reorganization.
24. Noncontrolling interests in consolidated subsidiaries. The disclosure requirements of § 210.5-02.31 shall be followed.
14. Amend § 210.7-04 by:
a. Removing paragraph 10;
b. Redesignating paragraphs 11, 12, 13, 14, 15, 16, and 17 as paragraphs 10, 11, 12, 13, 14, 15, and 16;
c. Redesignating paragraph 18 as paragraph 19; and
d. Adding new paragraphs 17 and 18.
§ 210.7-04
§ 210.7-05
15. Amend § 210.7-05:
a. In Schedule II, in the last sentence, remove the reference “(§ 210.7-03.21) and minority interests” and add in its place the reference “(§ 210.7-03.20) and noncontrolling interests”.
16. In § 210.8-03, revise paragraphs (b)(3) and (b)(4) to read as follows:
§ 210.8-03
(3) Significant equity investees. Sales, gross profit, net income (loss) from continuing operations, net income, and net income attributable to the investee must be disclosed for equity investees that constitute 20 percent or more of a registrant's consolidated assets, equity or income from continuing operations attributable to the registrant.
(4) Significant dispositions and business combinations. If a significant disposition or business combination has occurred during the most recent interim period and the transaction required the filing of a Form 8-K (§ 249.308 of this chapter), pro forma data must be presented that reflects revenue, income from continuing operations, net income, net income attributable to the registrant and income per share for the current interim period and the corresponding interim period of the preceding fiscal year as though the transaction occurred at the beginning of the periods.
§ 210.8-04
17. Amend § 210.8-04 by:
a. Revising paragraph (a), first sentence, the phrase “If a business combination accounted for as a ‘purchase’ has occurred or is probable,” to read “If a business combination has occurred or is probable,”;
b. Revising paragraph (a)(1) to read “This encompasses the purchase of an interest in a business accounted for by the equity method.”;
c. Revising paragraph (b)(3), the phrase “of the acquiree” to read “of the acquiree exclusive of amounts attributable to any noncontrolling interests”; and
18. Amend § 210.8-08 by revising paragraphs (b)(2) and (b)(3) to read as follows:
§ 210.8-08
(2) For the most recent fiscal year for which audited financial statements are not yet available, the smaller reporting company reasonably and in good faith expects to report income from continuing operations attributable to the registrant before taxes; and
(3) For at least one of the two fiscal years immediately preceding the most recent fiscal year the smaller reporting company reported income from continuing operations attributable to the registrant before taxes.
19. Amend § 210.9-03 by:
a. Removing paragraph 18;
b. Redesignating paragraphs 19, 20, 21, and 22 as paragraphs 18, 19, 20, and 21;
c. Revising redesignated paragraphs 18, 19, 20, and 21;
d. Adding an undesignated heading following redesignated paragraph 21;
e. Adding new paragraph 22; and
f. Revising paragraph 23.
§ 210.9-03
18. Preferred stocks subject to mandatory redemption requirements or whose redemption is outside the control of the issuer. See § 210.5-02.27.
19. Preferred stocks which are not redeemable or are redeemable solely at the option of the issuer. See § 210.5-02.28.
20. Common stocks. See § 210.5-02.29.
21. Other stockholders' equity. See § 210.5-02.30.
22. Noncontrolling interests in consolidated subsidiaries. The disclosure requirements of § 210.5-02.31 shall be followed.
20. Amend § 210.9-04 by:
a. Removing paragraph 14(e);
b. Redesignating paragraph 21 as paragraph 23; and
c. Adding new paragraphs 21 and 22.
§ 210.9-04
21. Amend § 210.9-06 by revising the last sentence to read as follows:
§ 210.9-06
* * * Redeemable preferred stocks (§ 210.5-02.27) and noncontrolling interests shall be deducted in computing net assets for purposes of this test.
22. Amend § 210.10-01 by revising paragraphs (b)(3) and (b)(4) to read as follows:
§§ 210.11-01—210.11-03
23. Remove the authority citation for §§ 210.11-01 through 210.11-03 following the undesignated heading “Pro Forma Financial Information”.
24. Amend § 210.11-01 by revising paragraphs (a)(1) and (a)(2) to read as follows:
§ 210.11-01
(1) During the most recent fiscal year or subsequent interim period for which a balance sheet is required by § 210.3-01, a significant business combination has occurred (for purposes of these rules, this encompasses the acquisition of an interest in a business accounted for by the equity method);
(2) After the date of the most recent balance sheet filed pursuant to § 210.3-01, consummation of a significant business combination or a combination of entities under common control has occurred or is probable;
25. Amend § 210.11-02 by revising paragraph (b)(3) and the first sentence of Instruction 2 to read as follows:
§ 210.11-02
2. For a business combination, pro forma adjustments for the income Start Printed Page 18617statement shall include amortization, depreciation and other adjustments based on the allocated purchase price of net assets acquired. * * *
26. Amend part 211, subpart A, by adding “Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies”, Release No. FR-79 and the release date of April 15, 2009 to the list of interpretive releases.
27. The authority citation for part 229 continues to read in part as follows:
Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 777iii, 77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78 l, 78m, 78n, 78o, 78u-5, 78w, 78 ll, 78mm, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a-31(c), 80a-37, 80a-38(a), 80a-39, 80b-11, and 7201 et seq.; 18 U.S.C. 1350, unless otherwise noted.
§ 229.301
28. Amend § 229.301, Instruction 2 to the
29. Amend § 229.302 by revising paragraphs (a)(1) and (a)(2) to read as follows:
(1) Disclosure shall be made of net sales, gross profit (net sales less costs and expenses associated directly with or allocated to products sold or services rendered), income (loss) before extraordinary items and cumulative effect of a change in accounting, per share data based upon such income (loss), net income (loss) and net income (loss) attributable to the registrant, for each full quarter within the two most recent fiscal years and any subsequent interim period for which financial statements are included or are required to be included by Article 3 of Regulation S-X (Part 210 of this chapter).
(2) When the data supplied pursuant to paragraph (a) of this section vary from the amounts previously reported on the Form 10-Q (§ 249.308a of this chapter) filed for any quarter, such as would be the case when a combination between entities under common control occurs or where an error is corrected, reconcile the amounts given with those previously reported and describe the reason for the difference.
30. Amend § 229.305, Instruction 3.C.ii.,
31. Amend § 229.503 by revising Instruction 1.(C) to the
Instructions to paragraph 503(d):
1. Definitions. * * *
(C) Earnings. The term “earnings” is the amount resulting from adding and subtracting the following items. Add the following: (a) pre-tax income from continuing operations before adjustment for income or loss from equity investees; (b) fixed charges; (c) amortization of capitalized interest; (d) distributed income of equity investees; and (e) your share of pre-tax losses of equity investees for which charges arising from guarantees are included in fixed charges. From the total of the added items, subtract the following: (a) interest capitalized; (b) preference security dividend requirements of consolidated subsidiaries; and (c) the noncontrolling interest in pre-tax income of subsidiaries that have not incurred fixed charges. Equity investees are investments that you account for using the equity method of accounting. Public utilities following SFAS 71 should not add amortization of capitalized interest in determining earnings, nor reduce fixed charges by any allowance for funds used during construction.
32. The authority citation for part 239 continues to read in part as follows:
33. Amend Form S-3 (referenced in § 239.13) by revising Item 11(b)(iii) to read as follows:
[Note: The text of Form S-3 does not, and this amendment will not, appear in the Code of Federal Regulations.]
(b) * * * (iii) restated financial statements prepared in accordance with Regulation S-X where a combination of entities under common control has been consummated subsequent to the most recent fiscal year and the transferred businesses, considered in the aggregate, are significant pursuant to Rule 11-01(b), or * * *
34. Amend Form S-4 (referenced in § 239.25) by revising the Instruction to paragraphs (e) and (f) in Item 3 and Item 12(b)(2)(iv) to read as follows:
[Note: The text of Form S-4 does not, and this amendment will not, appear in the Code of Federal Regulations.]
Item 3. Risk Factors, Ratio of Earnings to Fixed Charges and Other Information.
Instruction to paragraphs (e) and (f).
For a business combination, the financial information required by paragraphs (e) and (f) shall be presented only for the most recent fiscal year and interim period. For a combination between entities under common control, the financial information required by paragraphs (e) and (f) (except for information with regard to book value) shall be presented for the most recent three fiscal years and interim period. For a combination between entities under common control, information with regard to book value shall be presented as of the end of the most recent fiscal year and interim period. Equivalent pro forma per share amounts shall be calculated by multiplying the pro forma income (loss) per share before non-recurring charges or credits directly attributable to the transaction, pro forma book value per share, and the pro forma dividends per share of the registrant by the exchange ratio so that the per share amounts are equated to the respective Start Printed Page 18618values for one share of the company being acquired.
Item 12. Information with Respect to S-3 Registrants.
(iv) restated financial statements prepared in accordance with Regulation S-X where a combination under common control has been consummated subsequent to the most recent fiscal year and the businesses transferred, considered in the aggregate, are significant pursuant to Rule 11-01(b) of Regulation S-X; and
35. Amend Form F-3 (referenced in § 239.33) by revising Item 5(b)(1)(iii) to read as follows:
The text of Form F-3 does not, and this amendment will not, appear in the Code of Federal Regulations.]
Item 5. Material Changes.
(iii) restated financial statements where a combination of entities under common control has been consummated subsequent to the most recent fiscal year and the transferred businesses, considered in the aggregate, are significant under Rule 11-01(b) of Regulation S-X; or
36. Amend Form 1-A (referenced in § 239.90), Part F/S, by revising paragraphs (3)(a)(i), (3)(a)(ii), and (4)(a) to read as follows:
The text of Form 1-A does not, and this amendment will not, appear in the Code of Federal Regulations.]
(3) Financial Statements of Businesses Acquired or to be Acquired.
(i) A significant business combination has occurred or is probable (for purposes of this rule, this encompasses the acquisition of an interest in a business accounted for by the equity method); or
(ii) Consummation of a combination between entities under common control.
(4) Pro Forma Financial Information.
(a) Pro forma information shall be furnished if any of the following conditions exist (for purposes of this rule, “business combination” encompasses the acquisition of an interest in a business accounted for by the equity method):
(i) During the most recent fiscal year or subsequent interim period for which a balance sheet of the registrant is required, a significant business combination has occurred.
(ii) After the date of the registrant's most recent balance sheet, consummation of a significant business combination or a combination between entities under common control has occurred or is probable.
37. The authority citation for part 240 continues to read in part as follows:
38. Amend § 240.12b-2 to revise the definition of “Significant subsidiary” and Computational Note following it to read as follows:
(2) The registrant's and its other subsidiaries' proportionate share of the total assets (after intercompany eliminations) of the subsidiary exceeds 10 percent of the total assets of the registrant and its subsidiaries consolidated as of the end of the most recently completed fiscal year; or
Computational note: For purposes of making the prescribed income test the following guidance should be applied:
39. Amend § 240.14a-101, Item 14, by revising Instruction 1 to the
Item 14. * * *
Start Part Start Printed Page 18619
40. The authority citation for part 249 continues to read in part as follows:
41. Amend Form 20-F (referenced in § 249.220f) by, in Item 11,
The text of Form 20-F does not, and this amendment will not, appear in the Code of Federal Regulations.]
General Instructions to Items 11(a) and 11(b).
C.i. * * *
ii. Other financial instruments exclude employers and plans obligations for pension and other post-retirement benefits, substantively extinguished debt, insurance contracts, lease contracts, warranty obligations and rights, unconditional purchase obligations, investments accounted for under the equity method, noncontrolling interests in consolidated enterprises, and equity instruments issued by the registrant and classified in stockholders' equity in the statement of financial position (see, e.g., FAS 107, paragraph 8 (December 1991)). For purposes of this item, trade accounts receivable and trade accounts payable need not be considered other financial instruments when their carrying amounts approximate fair value; and
1. 17 CFR 210.
2. 17 CFR 229.
5. 17 CFR 210.1-02, 210.3-01, 210.3-04, 210.3-05, 210.3-10, 210.3A-02, 210.4-08, 210.5-02, 210.5-03, 210.5-04, 210.7-03, 210.7-04, 210.7-05, 210.8-03, 210.8-04, 210.8-08, 210.9-03, 210.9-04, 210.9-06, 210.10-01, 210.11-01, and 210.11-02.
6. 17 CFR 229.301, 229.302, 229.305, and 229.503.
7. 17 CFR 240.12b-2.
8. 17 CFR 239.13, 239.25, 239.33, and 239.90.
9. 17 CFR 240.14a-101.
10. 17 CFR 249.220f.
11. See Financial Reporting Release No. 70.
12. See, e.g., Rule 4-01(a)(1) of Regulation S-X [17 CFR 210.4-01(a)(1)].
13. ARB 51 is Accounting Research Bulletin No. 51, Consolidated Financial Statements, adopted in August 1959 by the Committee on Accounting Procedure of the Accounting Principles Board.
14. 5 U.S.C. 553(b).
15. For similar reasons, the amendments do not require analysis under the Regulatory Flexibility Act or analysis of major rule status under the Small Business Regulatory Enforcement Fairness Act. See 5 U.S.C. 601(2) (for purposes of Regulatory Flexibility Act analysis, the term “rule” means any rule for which the agency publishes a general notice of proposed rulemaking); and 5 U.S.C. 804(3)(C) (for purposes of Congressional review of agency rulemaking, the term “rule” does not include any rule of agency organization, procedure or practice that does not substantially affect the rights or obligations of non-agency parties).
18. 15 U.S.C. 77f, 77g, 77j, and 77s(a).
19. 15 U.S.C. 78 l, 78m, 78n(a), 78o(d), and 78w(a).
[FR Doc. E9-9089 Filed 4-22-09; 8:45 am]