SEC's Division of Corporation Finance Issues Guidance on Disclosure by Smaller Financial Institutions | Practical Law

SEC's Division of Corporation Finance Issues Guidance on Disclosure by Smaller Financial Institutions | Practical Law

The SEC's Division of Corporation Finance issued guidance summarizing its observations on Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) and accounting policy disclosures of smaller financial institutions.

SEC's Division of Corporation Finance Issues Guidance on Disclosure by Smaller Financial Institutions

by PLC Corporate & Securities
Published on 20 Apr 2012 • USA (National/Federal)
The SEC's Division of Corporation Finance issued guidance summarizing its observations on Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) and accounting policy disclosures of smaller financial institutions.
On April 20, 2012, the SEC's Division of Corporation Finance issued CF Disclosure Guidance: Topic No. 5, summarizing the observations of the Division's staff on the Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) and accounting policy disclosures of smaller financial institutions.
Topics covered in this guidance include:
  • Asset quality and loan accounting issues, including:
    • allowance for loan losses;
    • charge-off and nonaccrual policies;
    • commercial real estate;
    • loans measured for impairment based on collateral value;
    • credit risk concentrations;
    • troubled debt restructurings and modificiations; and
    • other real estate owned.
  • Deferred taxes.
  • FDIC-assisted transactions.
For each topic, the guidance describes the types of disclosure that typically prompt the staff to request clarification or additional information from the issuer. Smaller financial institutions and their counsel should study this guidance to improve the disclosure in their SEC filings and avoid future SEC comments.
For general information on MD&A disclosure, see Practice Note, Preparation of Management's Discussion and Analysis of Financial Condition and Results of Operations.