INTERNATIONAL INTERNATIONAL REPORTING REPORTING ISSUES ISSUES - - PowerPoint PPT Presentation

INTERNATIONAL INTERNATIONAL REPORTING REPORTING ISSUES ISSUES

Craig Olinger Craig Olinger

National Conference on Current SEC & PCAOB Developments December 10, 2008

The Securities and Exchange The Securities and Exchange Commission, as a matter of policy, Commission, as a matter of policy, disclaims responsibility for any disclaims responsibility for any private publication or statement by private publication or statement by any of its employees. Therefore, the any of its employees. Therefore, the views expressed today are my own, views expressed today are my own, and do not necessarily reflect the and do not necessarily reflect the views of the Commission or the other views of the Commission or the other members of the staff of the members of the staff of the Commission. Commission.

Disclaimer Disclaimer

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Overview Overview

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Foreign Private Issuers Foreign Private Issuers

December 31, 2004 December 31, 2004 Canada Canada 500 500 UK UK 105 105 Israel Israel 85 85 Cayman Islands Cayman Islands 25 25 Rest of Europe Rest of Europe 190 190 Latin America Latin America 120 120 Asia/Pacific Asia/Pacific 120 120 Other Other 105 105 Total Total 1,240 1,240 December 31, 2007 December 31, 2007 Canada Canada 450 450 UK UK 50 50 Israel Israel 90 90 Cayman Islands Cayman Islands 70 70 Rest of Europe Rest of Europe 105 105 Latin America Latin America 95 95 Asia/Pacific Asia/Pacific 110 110 Other Other 88 88 Total Total 1,058 1,058

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Rulemaking Rulemaking

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Final Rules Final Rules -

• International

International

Revisions to the Cross Revisions to the Cross-

• Border Tender

Border Tender Offer, Exchange Offer, and Business Offer, Exchange Offer, and Business Combination Rules and Beneficial Combination Rules and Beneficial Ownership Reporting Rules for Certain Ownership Reporting Rules for Certain Foreign Institutions Foreign Institutions

Release 34 Release 34-

• 58597 (September 19, 2008)

58597 (September 19, 2008)

http://www.sec.gov/rules/final/2008/34 http://www.sec.gov/rules/final/2008/34-

• 58597.pdf

58597.pdf

Effective date December 8, 2008 Effective date December 8, 2008

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Final Rules Final Rules -

• International

International

Exemption from Registration Under Exemption from Registration Under Section 12(g) of the Securities Exchange Section 12(g) of the Securities Exchange Act of 1934 for Foreign Private Issuers Act of 1934 for Foreign Private Issuers

Release 34 Release 34-

• 58465 (September 5, 2008)

58465 (September 5, 2008) http://www.sec.gov/rules/final/2008/34 http://www.sec.gov/rules/final/2008/34-

• 58465.pdf

58465.pdf

Effective date Effective date – – October 10, 2008 October 10, 2008

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Final Rules Final Rules -

• International

International

Foreign Issuer Reporting Foreign Issuer Reporting Enhancements (FIRE) Enhancements (FIRE)

Release 33 Release 33-

• 8939 (September 23, 2008)

8939 (September 23, 2008) http://www.sec.gov/rules/final/2008/33 http://www.sec.gov/rules/final/2008/33-

• 8959.pdf

8959.pdf Effective date December 6, 2008 Effective date December 6, 2008

• 8 individual revisions

8 individual revisions

• Various compliance dates

Various compliance dates

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Foreign Issuer Reporting Foreign Issuer Reporting Enhancements (FIRE) Enhancements (FIRE)

Non Non-

• financial Disclosures

financial Disclosures

• Disclosure of corporate governance

Disclosure of corporate governance differences (2008) differences (2008)

• Permits FPI status test once per year

Permits FPI status test once per year

• Disclosure of ADR fees (2009)

Disclosure of ADR fees (2009)

• Rule 13e

Rule 13e-

• 3 conforming changes

3 conforming changes

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Foreign Issuer Reporting Foreign Issuer Reporting Enhancements (FIRE) Enhancements (FIRE)

Disclosure of Change of Disclosure of Change of Accountants and Accountants and Disagreements (2009) Disagreements (2009)

• Same disclosures as Item 304 of S

Same disclosures as Item 304 of S-

• K

K

• File as part of annual 20

File as part of annual 20-

• F and

F and registration statements registration statements

• Transition

Transition

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Foreign Issuer Reporting Foreign Issuer Reporting Enhancements (FIRE) Enhancements (FIRE)

Eliminates Narrow Segment Eliminates Narrow Segment Accommodation (2009) Accommodation (2009)

• Used only by a handful of Item 17 US

Used only by a handful of Item 17 US GAAP filers GAAP filers

• Was incompatible with US GAAP and

Was incompatible with US GAAP and IFRS IFRS

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Foreign Issuer Reporting Foreign Issuer Reporting Enhancements (FIRE) Enhancements (FIRE)

Accelerates Annual Report Deadline Accelerates Annual Report Deadline from 6 Months to 4 Months after from 6 Months to 4 Months after FYE (2011) FYE (2011)

• Compatible with major foreign reporting

Compatible with major foreign reporting deadlines deadlines

• Compliance date coincides with Canadian

Compliance date coincides with Canadian implementation of IFRS implementation of IFRS

• Does not change age of financial statements

Does not change age of financial statements required for registration statements required for registration statements

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Foreign Issuer Reporting Foreign Issuer Reporting Enhancements (FIRE) Enhancements (FIRE)

Item 18 Compliance for All Issuers Item 18 Compliance for All Issuers that Reconcile to US GAAP (2011) that Reconcile to US GAAP (2011)

• Item 18 = All US GAAP and Regulation S

Item 18 = All US GAAP and Regulation S-

• X

X disclosures disclosures

• Item 18 required for 34 Act registration

Item 18 required for 34 Act registration statements and annual reports statements and annual reports

• Item 17 still permitted for non

Item 17 still permitted for non-

• issuers

issuers (e.g. 3 (e.g. 3-

• 05s, 3

05s, 3-

• 09s)

09s)

• Compliance date coincides with Canadian

Compliance date coincides with Canadian implementation of IFRS implementation of IFRS

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Proposed Rules Proposed Rules

Interactive Data to Improve Financial Interactive Data to Improve Financial Reporting [XBRL] Reporting [XBRL]

Release 33 Release 33-

• 8924 (May 30, 2008)

8924 (May 30, 2008)

http://www.sec.gov/rules/proposed/2008/33 http://www.sec.gov/rules/proposed/2008/33-

• 8924.pdf

8924.pdf

Modernization of the Oil and Gas Modernization of the Oil and Gas Reporting Requirements Reporting Requirements

Release 33 Release 33-

• 8935 (June 26, 2008)

8935 (June 26, 2008)

http://www.sec.gov/rules/proposed/2008/33 http://www.sec.gov/rules/proposed/2008/33-

• 8935.pdf

8935.pdf

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IFRS Rulemaking IFRS Rulemaking -

• FPIs

FPIs

Acceptance of IFRS* Financial Acceptance of IFRS* Financial Statements from FPIs without Statements from FPIs without Reconciliation to US GAAP Reconciliation to US GAAP

(Release No. 33 (Release No. 33-

• 8879

8879 -

• December 21,

December 21, 2007) 2007)

*IFRS as issued by the IASB *IFRS as issued by the IASB

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IFRS Rulemaking IFRS Rulemaking -

• FPIs

FPIs

Eligibility to omit US GAAP Eligibility to omit US GAAP reconciliation: reconciliation:

FPI must state compliance FPI must state compliance with IFRS with IFRS as issued by the IASB in notes to the as issued by the IASB in notes to the financial statements financial statements Auditor must opine Auditor must opine on issuer

• n issuer’

’s s compliance with IFRS as issued by compliance with IFRS as issued by the IASB the IASB

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IFRS/Reconciliation Rule IFRS/Reconciliation Rule

Does Does not not permit permit reconciliation to reconciliation to IFRS as issued by the IASB IFRS as issued by the IASB

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IFRS/Reconciliation Rule IFRS/Reconciliation Rule

Implementation issues Implementation issues

• Early 20

Early 20-

• F filers

F filers

• assertions of compliance

assertions of compliance

• Non

Non-

• financial statement disclosure

financial statement disclosure requirements that reference S requirements that reference S-

• X

X

• First

First-

• time adopters

time adopters

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IFRS/Reconciliation Rule IFRS/Reconciliation Rule

Recent implementation issues Recent implementation issues

First First-

• time adopter with different

time adopter with different “ “previous GAAPs previous GAAPs” ” in different in different jurisdictions jurisdictions

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20

IFRS/Reconciliation Rule IFRS/Reconciliation Rule

Recent implementation issues Recent implementation issues

Change from US GAAP to IFRS/IASB Change from US GAAP to IFRS/IASB – – not first not first-

• time adopter

time adopter

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Roadmap for Potential Use of IFRS Roadmap for Potential Use of IFRS by US Issuers by US Issuers

Release 33 Release 33-

• 8982 (November 14, 2008)

8982 (November 14, 2008)

http://www.sec.gov/rules/proposed/2008/33 http://www.sec.gov/rules/proposed/2008/33-

• 8982.pdf

8982.pdf

Generally, no impact on FPIs that file IFRS Generally, no impact on FPIs that file IFRS as issued by the IASB on Form 20 as issued by the IASB on Form 20-

• F

F Roadmap Proposed Rules for early IFRS Roadmap Proposed Rules for early IFRS use by limited number of domestic issuers use by limited number of domestic issuers

– – would permit IFRS issuers (domestic) and would permit IFRS issuers (domestic) and all all FPIs FPIs to file to file any any 3 3-

• 05s, 3

05s, 3-

• 09s and 3

09s and 3-

• 14 financials

14 financials under IFRS as issued by the IASB without under IFRS as issued by the IASB without reconciliation (currently must be foreign reconciliation (currently must be foreign business) business)

• proposed new Article 13 of Regulation S

proposed new Article 13 of Regulation S-

• X

X

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Other Reporting Issues Other Reporting Issues

Reverse recapitalization of non Reverse recapitalization of non-

• reporting foreign business into

reporting foreign business into domestic public shell company domestic public shell company

• 8

8-

• K within 4 business days

K within 4 business days

• Form 10

Form 10-

• level content

level content

• Financial statements of foreign

Financial statements of foreign business must be US GAAP, not home business must be US GAAP, not home– – country GAAP with reconciliation country GAAP with reconciliation

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Conclusion Conclusion

Questions? Questions?