An SEC proposal to "modernize, simplify, and enhance" certain Regulation S-K financial disclosure requirements was published in the Federal Register. Comments must be received by April 28, 2020.

As previously covered, the proposal - which follows the publication of a staff report - is part of a broader initiative to assess and improve the agency's disclosure requirements. The proposal would, among other things:

  • eliminate duplicative requirements contained in Item 301 ("Selected Financial Data"), Item 302 ("Supplementary Financial Information") and Item 303(a)(5) ("Tabular Disclosure of Contractual Obligations");

  • modernize Management's Discussion and Analysis ("MD&A") disclosures by amending Item 303;

  • explicitly state the principal objectives of MD&A under new Item 303(a);

  • introduce a principles-based instruction - replacing Item 303(a)(4) ("Off-Balance Sheet Arrangements") - that would encourage registrants to assess off-balance sheet arrangements in the broader context of MD&A;

  • clarify and codify existing SEC guidance under a new disclosure requirement added to Item 303; and

  • modify the interim MD&A requirement in Item 303(b) to allow companies to compare their most recent quarter to either (i) the corresponding quarter of the prior year or (ii) the immediately preceding quarter.