SEC Updates Q & A on Smaller Reporting Companies Issues – Part I
The SEC recently updated its Q & A on a variety of other areas related to Regulation S-K, several of which apply to smaller reporting companies.
Question 102.01 asks the following:
Could a company with a fiscal year ended December 31, 2007 be both a “smaller reporting company,” as defined in Item 10(f), and an “accelerated filer,” as defined in Rule 12b-2 under the Exchange Act, for filings due in 2008, if it was an accelerated filer with respect to filings due in 2007 and had a public float of $60 million on the last business day of its second fiscal quarter of 2007?
- You have to look at both definitions to see if you qualify as both a smaller reporting company and as a non-accelerated filer for each year.
- This company qualified as a smaller reporting company for 2008 filings, as 2007 was the initial year for such a determination, and it had less than $75 million in public float as of the end of its second fiscal quarter.
- The company is an accelerated filer with respect to 2007 filings, as it needed under $75 million in public float to exit accelerated filer status.
- This company could use the scaled disclosure rules for smaller reporting companies in its annual report on Form 10-K.
- The 10-K would be due 75 days after its year end, because it is an accelerated filer.
- It would need to have an auditors Section 404(b) attestation on its internal controls over financial reporting.
Kind of an interesting situation and one that companies need to continue to monitor.
Joel M. Ungar, CPA is a lifelong resident of the Detroit area and a graduate of The University of Michigan. He is a principal with Silberstein Ungar, PLLC, a Top 15 auditor of SEC public reporting companies. Joel writes observations on different matters and especially on working with and using LinkedIn. He thinks he has a sense of humor.