Far 6 and Far 7

What is included in the summary of Significant Accounting Policies

Basis of Preparation and Presentation

Criteria for determining Cash and Cash equivalents

Accounting policy for depreciation of Tangible assets

Accounting Policy for Amortization of Intangible Assets

Inventory Costing Techniques

Inventory Valuation Techniques

Valuation Techniques for Marketable Securities

Valuation Method used for Derivates

Revenue Recognition Policies

Significant Estimates

Industry Specific Principles

Unusual, Unique or Innovative Application of Accounting Policy

What is included in the policy for the depreciation of tangible assets?

• Straight-Line method

• Double declining balance method

• Units of production method

• Sum-of-Digits of Years Method

What is included in Inventory Costing Techniques?

FIFO, LIFO, Dollar Value LIFO, Retail Inventory Methods and Weighted Average

Inventory Valuation Techniques include

Lower of Cost or Market Value

Lower of Cost or NRV

Key Estimates and Methodology used by the Management in arriving at significant estimates. For Example:

Useful Life of Asset

Salvage Value of Asset

Estimate Warranty Expenses

Estimate Credit Loss (Bad Debt Expense)

Value of Intangibles

Related parties include:

Parent and Subsidiary Entities and Subsidiaries of Common Parents

Affiliate Entities

Employee Benefit Plan of the Company

Owners of 10% Voting Interest

Management and their immediate Family Members

Disclosure requirements for related Party Transactions include:

Nature of Relationship

Description of the Transaction

Amount of the Transaction

Amount outstanding as of Year End

Exception to Disclosure Requirements

Transactions in Ordinary Course of Business such as Salaries, Expense Reimbursements, Perks etc. need not be disclosed.

Transactions eliminated during Consolidation.

Key indicators that might raise substantial doubt about an entity's ability to continue as a going concern

Recurring Operating Losses

Negative Cashflow from Operating Activities

Default on Loans and Payables

Significant Legal Proceeding against the Entity

Other Adverse Conditions:

Declining Sales

Declining Market Share

Loss of Key Customers

Inability to Borrow Money

Disclosure requirements for going concern:

Conditions or Events that raised Substantial Doubt.

Managements Evaluation of those Events.

Managements Plan to remove Substantial Doubt

If Substantial Doubt is not alleviated, must disclose that there is a Substantial Doubt about Entity's Ability to Continue as a Going Concern.

Risks and Uncertainties include:

Credit Risk		Customers might not pay you, Borrowers might not repay you.
Market Risk		Innovation by Customers.
Operation Risk		Risk of Labor Strikes, Outdated Machinery, Lack of Innovation.
Concentration Risk		Significant Reliance on Specific Customers, Suppliers, Product Lines, Geographies
Compliance Risk		Lack of Compliance with Changing Laws and Regulations

How does SEC Protects Investors?

Regulating Market Participants (Brokers, Dealers, Investment Advisors)

Disclosure Requirements for Public Companies

Rule Making

Enforcing Rules via Sanctions and Disciplinary Actions against Violators

What companies are subject to SEC Reporting Requirements?

Public Companies which are traded on Recognized Stock Exchange (NYSE or NASDAQ) or over the counter markets

Companies with Assets > $10 Million and 2,000 or more Shareholders (or 500 or more Non-Accredited Shareholders)

Regulation S-K

Provides guidelines for non-financial disclosures such as:

Business Description

Risk Factors

Management's Discussion and Analysis

Executive Compensations

Legal Proceedings

Corporate Governance Structure

Related Party Transactions

Regulation S-X

Provides guidelines for financial disclosures. Also includes Comparative Financial Statements and Auditor’s Audit report and review reports.

10-K report

the annual report that public companies must file with SEC.

4 parts of 10-k reports

• Business Information

• Financial information

• Governance information

• Exhibits and Schedules

What is included in the Business information of 10-K?

Business Description

Risk Factors

Properties

Legal Proceedings

Mine Safety Disclosures

What is included in the financial information of a 10-K

Selected Financial Data		Compairison of Company's performance over the past five years including Revenue, Net Income, Earnings per Share, Share Price etc.
Management Discussion and Analysis (MD&A) of Financial Condition and Results of Operations
Financial Statements and Notes to Financial Statements

Quantitative and Qualitative Disclosure about Market Risk

What is included in the governance information of 10-K?

Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management
Certain Relationships and Related Transactions, and Director Independence

What is included in exhibits and schedules of 10-K

Exhibits	Material Contracts
	Byelaws
	Articles of Incorporation
	Executive Compensation Plans
	Subsidiary Lists
Schedules	Schedules of Fixed Assets
	Schedules of Debt
	Schedules of Derivatives
	Schedules of Investments

Small reporting company

a classification by SEC which allows smaller companies to provide less detailed information in their filings (10-K and 10-Q) compared to larger companies. This reduced compliance burden for small eligible companies.

A company will qualify as a Small Reporting Company if it meets either of the following conditions at the end of its Second Fiscal Quarter.

Market Cap (Public Float) of less than $250 Million; regardless of revenue

Market Cap (Public Float) of more  than $250 Million but less than $700 Million and annual revenue of less than $100 Million

If Shareholders request Form 10-K, how many days does the company have to provide the requested forms?

15

Form 10-K filing deadlines

Large accelerated filer	Market cap of $700 Million or more	60 days after the fiscal year end
Accelerated filer	Market Cap is between $75 Million and $700 Million and Annual Revenue is more than $100 Million	75 days after fiscal year end
Non-Accelerated Filer	Market Cap is less than $75 Million or Market Cap is between $75 Million and $700 Million and Annual Revenue is less than $100 Million	90 days after fiscal year end

What is included in form 10-Q?

• Financial Statements

  • unaudited, filed for each of the first three fiscal quarters of the entity’s fiscal year.

  • Balance sheet — As of the end of the most recent fiscal quarter and as of the end of the preceding fiscal year

  • Income statement and other comprehensive income

    • For the most recent fiscal quarter

    • For the period btw the end of preceding fiscal year and the end of the most recent fiscal quarter

    • For the corresponding periods of the preceding fiscal year

  • Statement of cashflows

    • For the period btw the end of the preceding fiscal year and the end of the most recent fiscal quarter

    • the corresponding period for the preceding fiscal year

• Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A)

  • from the end of the preceding fiscal year to the date of the most recent interim balance sheet.

• Quantitative and Qualitative Disclosures about Market Risk

Form 8-K

a report that companies must file with the U.S. Securities and Exchange Commission (SEC) to disclose the occurrence of certain significant events that investors should know about promptly, rather than waiting for the next periodic report. The purpose of the _____ is to provide investors with current and relevant information that may affect their investment decisions.

• Bankruptcy

• Acquisition or disposition of assets

• Material cybersecurity incidents

• New material financial obligations

• Costs associated with exit or disposal activities

• Material asset impairments

• Changes in the public accounting firm used to audit the company

• Changes in securities and trading markets

• Changes in or election of directors and officers

• Amendments to bylaws or articles of incorporation

• Changes in fiscal year

• Financial statement changes

• Material definitive agreements

Some of the common events that a company might report on a Form 8-K include:

Enters or Exits a Material Agreement

Acquisition or Disposition of significant Assets.

Change in Auditor

Change in Directors or Executive Officers

Amendments to Byelaws and Articles of Incorporation

Press Release

Other Material Events

Within how many days are companies required to file 8-K?

4 days

Form 3

a filing made by Companies Insiders (Directors , Executive Officers or Owners of More than 10% Shares of the Company)

The SEC requires the insider to file a Form 3 within ____ days of becoming an Officer, Director, or Beneficial owner of the company's equity securities.

10 days

The form requires the insider to disclose their _____, ______, and ______, as well as the number and class of ________ they own or have the right to acquire.

name, address, and title, as well as the number and class of securities they own or have the right to acquire.

Form 4

a document that officers, directors, and any beneficial owners of more than 10% of a publicly traded company must file with the SEC to report any changes in their ownership of a company's equity securities.

Form 4 must be filed within ___ days.

2 days

Form 5

a document that officers, directors, and any beneficial owners of more than 10% of a publicly traded company must file with the U.S. Securities and Exchange Commission (SEC) to report any transactions that should have been reported on a previous Form 4 but were not reported, or that were reported on a previous Form 4 but had errors or omissions.

If a transaction should have been reported on a previous Form 4 but was not reported, the insider must file a Form 5 within ____ days after the end of the company's fiscal year in which the transaction occurred.

45

Form 11-K

a document that is required to be filed with the U.S. Securities and Exchange Commission (SEC) by Employee Benefit Plans that are subject to the Employee Retirement Income Security Act of 1974 (ERISA). requires the plan administrator to disclose information about the plan's investments, including the types of investments held, the value of those investments, and any changes in investment strategy or portfolio composition.

The 11-K form must be filed annually within ____ days after the end of the plan year.

120

Form 6-K

a document that is required to be filed by foreign private issuers with the SEC. (Foreign equivalent of 8-K)

Form 20-Fand 40-F

Foreign equivalent of 10-K report. Canadians file 40-F while other non-U.S. registrants file 20-F.

XBRL reporting

allows companies to tag their financial data with standardized definitions and codes, making it easier for stakeholders to analyze and compare financial data across companies and industries.

The main objectives of XBRL reporting under SEC are:

Standardization

Accuracy

Speed

Transparency

Analysis and Research