In August 2018, the U.S. Securities and Exchange Commission (SEC) voted to adopt amendments to certain disclosure requirements that have become duplicative, overlapping or outdated in light of other SEC disclosure requirements, U.S. Generally Accepted Accounting Principles (GAAP) or changes in the information environment. The amendments are intended to simplify and update the disclosure of information to investors and reduce compliance burdens for companies without significantly altering the total mix of information available to investors. The amendments took effect on 5 November 2018 and were released in a final rule.
These amendments apply primarily to public reporting companies in the United States (including foreign private issuers).
The amendments eliminate certain:
- Redundant and duplicative requirements, which require substantially similar disclosures as GAAP, International Financial Reporting Standards (IFRS) or other SEC disclosure requirements;
- Overlapping requirements, which are related to but not the same as GAAP, IFRS or other SEC disclosure requirements;
- Outdated requirements, which have become obsolete as a result of the passage of time or changes in the regulatory, business or technological environment; and
- Superseded requirements, which are inconsistent with recent legislation, more recently updated SEC disclosure requirements or more recently updated GAAP.
For foreign private issuers, one of the major changes was the deletion of the requirement to provide foreign exchange rate data when financial statements are prepared in a currency other than the U.S. dollar. The SEC made this change as foreign exchange rate information is readily available online.