Annual Report on Form 10-K Toolkit
Resources to prepare an annual report on Form 10-K.
Under the federal securities laws, reporting companies must disclose information on a continuous basis. Each year companies must file an annual report on Form 10-K that provides business and financial information for the most recently completed fiscal year.
Form 10-K is the most comprehensive periodic report required to be filed with the SEC. It:
Provides information about a company’s business and financial condition.
Includes audited financial statements for its two or three most recently completed fiscal years.
Form 10-K is different from, and provides more detailed information than, the annual report to stockholders, which provides a summary of the current state of the company and is delivered to stockholders with proxy materials for the annual stockholders’ meeting. In contrast, Form 10-K contains most of the information that would also be provided in a registration statement for an offering of securities.
The SEC has been increasingly focused on improving the adequacy, transparency and completeness of company reporting. For example, the SEC staff has indicated that, when reviewing a company’s Form 10-K and other periodic reports, they also review the company's earnings calls and press releases and other information the company makes publicly available (potentially including information posted on websites). Specifically, the staff looks for inconsistencies between what is filed with the SEC and what is said to analysts or investors. The SEC staff is particularly concerned with companies that use non-GAAP financial information in earnings releases and calls but fail to disclose this information in their periodic reports. The SEC staff attempts to issue comments on a company's Form 10-K and other SEC filings that will bring the two types of information in line with each other and ensure that the company provides consistent public disclosure. In addition, the SEC's Division of Corporation Finance periodically issues guidance on public disclosure. For example, the SEC staff issued guidance in October 2011 on public filing disclosure obligations relating to cyber security risks and cyber incidents and in April 2012 on MD&A and accounting policy disclosures of smaller financial institutions. The SEC staff also periodically issues guidance in the form of compliance and disclosure interpretations (C&DIs) relating to Regulation S-K, Form 10-K and other disclosure items. For example, the SEC staff issued new and revised C&DIs on the use of non-GAAP financial measures in May 2016.
The SEC is also moving ahead with its review of disclosure effectiveness, which is a broad-based staff review of the SEC's disclosure requirements, and the presentation and delivery of disclosures that companies make to investors. In April 2016, the SEC issued a concept release seeking public comment on modernizing certain business and financial disclosure requirements in Regulation S-K and in August 2016, the SEC issued a request for public comment on the disclosure requirements of Subpart 400 of Regulation S-K (relating to management and certain security holder information and corporate governance). Comments were due July 21 and October 31, 2016, respectively.
Companies preparing for their upcoming Form 10-K reports should re-evaluate their previous disclosure to:
Determine whether any modifications should be made to comply with federal rules.
Present a story consistent across all public disclosure.
Ensure that all material information continues to be disclosed.
Companies should also review and update disclosure of their risks and circumstances as the business and economic environment changes.
The Form 10-K Toolkit provides a number of continuously maintained resources to help in-house counsel prepare an Annual Report on Form 10-K.