ASC 270-10
Overall
270 Interim Reporting
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ASC 270-10 governs how GAAP is applied to interim financial information (monthly, quarterly, or other periods shorter than a year) and what must be disclosed. Its core rule is the "integral part" view: each interim period is viewed primarily as an integral part of an annual period, so results generally follow the accounting principles used in the latest annual financial statements, with specified modifications (e.g., inventory, LIFO liquidations, cost allocations, estimated annual effective tax rate). It also sets minimum disclosure requirements for publicly traded companies reporting summarized interim data, which ASU 2025-11 replaces with disclosure requirements keyed to interim financial statements and notes prepared in accordance with GAAP, including condensed statements.
Key points (7)
- Each interim period shall be viewed primarily as an integral part of an annual period, and interim results shall be based on the accounting principles and practices used in the latest annual financial statements unless a change was adopted in the current year (270-10-45-1; 270-10-45-2).
- Revenue is recognized in interim periods on the same Topic 606 basis followed for the full year, and projected contract losses under Subtopic 605-35 are recognized in full in the interim period in which their existence becomes evident (270-10-45-3).
- Costs are split between costs associated with revenue (charged when the related revenue is recognized) and all other costs and expenses (charged as incurred or allocated based on time expired, benefit received, or activity), with arbitrary assignment prohibited and no deferral of gains/losses that would not be deferred at year-end (270-10-45-4; 270-10-45-8).
- Interim inventory exceptions: disclose use of estimated gross profit rates; do not give effect to a LIFO base liquidation expected to be replaced by year-end (charge cost of sales with expected replacement cost); do not defer Subtopic 330-10 inventory losses beyond the interim period, but recognize later-period recoveries up to previously recognized losses; defer planned purchase price and volume variances (270-10-45-6).
- Year-end-type items (inventory shrinkage, allowance for uncollectible accounts, quantity discounts, discretionary bonuses) shall be estimated and assigned so each interim period bears a reasonable portion of the anticipated annual amount (270-10-45-10).
- Effects of disposals of a component and material unusual or infrequently occurring items are reported separately and shall not be prorated over the balance of the fiscal year; entities with material seasonal variations must disclose the seasonal nature of their activities (270-10-45-11; 270-10-45-11A).
- Changes in accounting estimate (including the estimated effective annual tax rate) are accounted for in the period of change with no restatement of prior interim information (270-10-45-14); publicly traded companies reporting summarized interim data must disclose the minimum items in 270-10-50-1 (revenues, tax provision, net income, comprehensive income, EPS, seasonality, contingencies, accounting changes, etc.), which ASU 2025-11 supersedes in favor of 270-10-50-8 through 50-70.
For students. Exam questions almost always test the integral-part view and its exceptions: inventory declines and unusual/infrequent items are recognized fully in the interim period they occur (never prorated), while annual-type costs such as property taxes, bonuses, and quantity discounts are allocated across interim periods using annual estimates. A common misunderstanding is treating each quarter as a wholly discrete period — and forgetting that income taxes are computed using the estimated annual effective tax rate under Subtopic 740-270.
interim reportingintegral part of annual periodestimated annual effective tax ratelifo liquidation at interim datecost allocation among interim periodscondensed financial statementsseasonality disclosureminimum interim disclosures
Machine-generated study aid for ASC 270-10. Check the source paragraphs below.
270-10-00Status
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270-10-00-1
The following table identifies the changes made to this Subtopic.
270-10-05Overview and Background
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270-10-05-1
The Interim Reporting Topic clarifies the application of accounting principles and reporting practices to interim financial information, including interim financial statements and summarized interim financial data of publicly traded companies issued for external reporting purposes. Interim financial information may include current data during a fiscal year on financial position, results of operations, comprehensive income, and cash flows. This information may be issued on a monthly or quarterly basis or at other intervals and may take the form of either complete financial statements or summarized financial data. Interim financial information often is provided for each interim period or on a cumulative year-to-date basis, or both, and for the corresponding periods of the preceding year.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The Interim Reporting Topic addresses the form and content of disclosures and application of accounting principles required for interim financial statements and notes in accordance with generally accepted accounting principles (GAAP).270-10-05-2
The determination of the results of operations on a meaningful basis for intervals of less than a full year presents inherent difficulties. The revenues of some entities fluctuate widely among interim periods because of seasonal factors, while in other entities heavy fixed costs incurred in one interim period may benefit other periods. In these situations, financial information for periods of less than a full year may be of limited usefulness. In other situations costs and expenses related to a full year's activities are incurred at infrequent intervals during the year and need to be allocated to products in process or to other interim periods to avoid distortion of interim financial results. In view of the limited time available to develop complete information, many costs and expenses are estimated in interim periods. For example, it may not be practical to perform extensive reviews of individual inventory items, costs on individual long-term contracts and precise income tax calculations for each interim period. Subsequent refinement or correction of these estimates may distort the results of operations of later interim periods. Similarly, the effects of disposal of a segment of an entity and unusual or infrequently occurring events and transactions on the results of operations in an interim period will often be more pronounced than they will be on the results for the annual period. Special attention must be given to disclosure of the impact of these items on financial information for interim periods.
270-10-10Objectives
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270-10-10-1
The principal objectives of the Interim Reporting Topic are to provide guidance on accounting and disclosure issues peculiar to interim reporting and to set forth minimum disclosure requirements for interim financial reports of publicly traded companies.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The principal objectives of the Interim Reporting Topic are to provide guidance on accounting and disclosure issues specific to interim reporting and to set forth disclosure requirements for entities that provide interim financial statements and notes in accordance with generally accepted accounting principles. 270-10-15Scope and Scope Exceptions
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Overall Guidance
270-10-15-1
The Scope Section of the Overall Subtopic establishes the pervasive scope for the Interim Reporting Topic.
Entities
270-10-15-2
The guidance in the Interim Reporting Topic applies to all entities.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The guidance in the Interim Reporting Topic applies to all entities that provide interim financial statements and notes in accordance with generally accepted accounting principles (GAAP), regardless of whether those interim financial statements and notes in accordance with GAAP are prepared at the same level of aggregation as the annual financial statements and annual notes or as condensed statements.Other Considerations
270-10-15-3
The guidance in the Interim Reporting Topic applies whenever entities issue interim financial information. It provides guidance on the applicability of generally accepted accounting principles (GAAP) to interim financial information and indicates types of disclosures necessary to report on a meaningful basis for a period of less than a full year. This Topic is not intended to deal with unresolved matters of accounting related to annual reporting.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The guidance in the Interim Reporting Topic applies to interim financial statements and notes in accordance with GAAP. This Topic also provides disclosure requirements necessary to report on a meaningful basis for a period of less than a full year. This Topic is not intended to deal with annual reporting.270-10-15-4
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1For the purposes of applying the guidance in this Topic, financial statements and notes in accordance with GAAP include those financial statements that are a full set of financial statements in accordance with the guidance in paragraph 205-10-45-1A. For example, if an entity issues only an income statement, that would not be considered a full set of financial statements and therefore would not be subject to the guidance in this Topic. For the purposes of applying this Topic, financial statements and notes in accordance with GAAP for not-for-profit entities are those that are equivalent to the statements listed in paragraph 205-10-45-1A, except for investments by and distributions to owners during the period.270-10-45Other Presentation Matters
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Accounting Principles and Practices
270-10-45-1
Interim financial information is essential to provide investors and others with timely information as to the progress of the entity. The usefulness of such information rests on the relationship that it has to the annual results of operations. Accordingly, each interim period should be viewed primarily as an integral part of an annual period.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The usefulness of interim financial statements and notes in accordance with generally accepted accounting principles (GAAP) rests on the relationship that they have to the annual results of operations. Each interim period should be viewed primarily as an integral part of an annual period. 270-10-45-2
In general, the results for each interim period shall be based on the accounting principles and practices used by an entity in the preparation of its latest annual financial statements unless a change in an accounting practice or policy has been adopted in the current year (see paragraphs ). However, certain accounting principles and practices followed for annual reporting purposes may require modification at interim reporting dates so that the reported results for the interim period may better relate to the results of operations for the annual period. Paragraphs sets forth the modifications that are necessary or desirable at interim dates in accounting principles or practices followed for annual periods.
Revenue
270-10-45-3
Revenue from products sold or services rendered shall be recognized as the entity satisfies a performance obligation by transferring a promised good or service to a customer. Those revenues shall be recognized during an interim period on the same basis as followed for the full year in accordance with Topic 606 on revenue from contracts with customers. For example, revenues from a long-term construction contract with a customer that includes performance obligations that the entity satisfies over time in accordance with paragraphs shall be recognized in interim periods on the same basis followed for the full year. Losses projected on contracts within the scope of Subtopic 605-35, in accordance with paragraphs , shall be recognized in full during the interim period in which the existence of such losses becomes evident.
Costs and Expenses
270-10-45-4
Costs and expenses for interim reporting purposes may be classified as either of the following:
- aCosts associated with revenue - those costs that are associated directly with or allocated to the products sold or to the services rendered and that are charged against income in those interim periods in which the related revenue is recognized
- bAll other costs and expenses - those costs and expenses that are not allocated to the products sold or to the services rendered and that are charged against income in interim fiscal periods as incurred, or are allocated among interim periods based on an estimate of time expired, benefit received, or other activity associated with the periods.
270-10-45-5
Those costs and expenses that are associated directly with or allocated to the products sold or to the services rendered for annual reporting purposes (including, for example, material costs, wages and salaries and related fringe benefits, manufacturing overhead, and warranties) shall be similarly treated for interim reporting purposes.
270-10-45-6
Practices vary in determining costs of inventory. For example, cost of goods produced may be determined based on standard or actual cost, while cost of inventory may be determined on an average, first-in, first-out (FIFO), or last-in, first-out (LIFO) cost basis. While entities generally shall use the same inventory pricing methods and make provisions for writedowns at interim dates on the same basis as used at annual inventory dates, the following exceptions are appropriate at interim reporting dates:
- aSome entities use estimated gross profit rates to determine the cost of goods sold during interim periods or use other methods different from those used at annual inventory dates. These entities shall disclose the method used at the interim date and any significant adjustments that result from reconciliations with the annual physical inventory.
- bEntities that use the LIFO method may encounter a liquidation of base period inventories at an interim date that is expected to be replaced by the end of the annual period. In those cases the inventory at the interim reporting date shall not give effect to the LIFO liquidation, and cost of sales for the interim reporting period shall include the expected cost of replacement of the liquidated LIFO base.
- cInventory losses from the application of the guidance on subsequent measurement in Subtopic 330-10shall not be deferred beyond the interim period in which the decline occurs. Recoveries of such losses on the same inventory in later interim periods of the same fiscal year through market value recoveries (for inventory measured using LIFO or the retail inventory method) or net realizable valuerecoveries (for all other inventory) shall be recognized as gains in the later interim period. Such gains shall not exceed previously recognized losses. Some declines in the market value (for inventory measured using LIFO or the retail inventory method) or net realizable value (for all other inventory) of inventory at interim dates, however, can reasonably be expected to be restored in the fiscal year. Such temporary declines need not be recognized at the interim date since no loss is expected to be incurred in the fiscal year.
- dEntities that use standard cost accounting systems for determining inventory and product costs should generally follow the same procedures in reporting purchase price, wage rate, usage, or efficiency variances from standard cost at the end of an interim period as followed at the end of a fiscal year. Purchase price variances or volume or capacity cost variances that are planned and expected to be absorbed by the end of the annual period, should ordinarily be deferred at interim reporting dates. The effect of unplanned or unanticipated purchase price or volume variances, however, shall be reported at the end of an interim period following the same procedures used at the end of a fiscal year.
270-10-45-7
Charges are made to income for all other costs and expenses in annual reporting periods based upon any of the following:
- aDirect expenditures made in the period (salaries and wages)
- bAccruals for estimated expenditures to be made at a later date (vacation pay)
- cAmortization of expenditures that affect more than one annual period (such as insurance premiums, interest, and rents).
270-10-45-8
The objective in all cases is to achieve a fair measure of results of operations for the annual period and to present fairly the financial position at the end of the annual period. The following standards shall apply in accounting for costs and expenses other than product costs in interim periods:
- aCosts and expenses other than product costs shall be charged to income in interim periods as incurred, or be allocated among interim periods based on an estimate of time expired, benefit received or activity associated with the periods. Procedures adopted for assigning specific cost and expense items to an interim period shall be consistent with the bases followed by the entity in reporting results of operations at annual reporting dates. However, if a specific cost or expense item charged to expense for annual reporting purposes benefits more than one interim period, the cost or expense item may be allocated to those interim periods (see paragraph 270-10-45-9).
- bSome costs and expenses incurred in an interim period, however, cannot be readily identified with the activities or benefits of other interim periods and shall be charged to the interim period in which incurred. Disclosure in the notes to financial statements shall be made as to the nature and amount of such costs unless items of a comparable nature are included in both the current interim period and in the corresponding interim period of the preceding year. (See paragraph 270-10-50-1B.)
- cArbitrary assignment of the amount of such costs to an interim period shall not be made.
- dGains and losses that arise in any interim period similar to those that would not be deferred at year end shall not be deferred to later interim periods within the same fiscal year.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The objective in all cases is to achieve a fair measure of results of operations for the annual period and to present fairly the financial position at the end of the annual period. The following standards shall apply in accounting for costs and expenses other than product costs in interim periods: - aCosts and expenses other than product costs shall be charged to income in interim periods as incurred, or be allocated among interim periods based on an estimate of time expired, benefit received or activity associated with the periods. Procedures adopted for assigning specific cost and expense items to an interim period shall be consistent with the bases followed by the entity in reporting results of operations at annual reporting dates. However, if a specific cost or expense item charged to expense for annual reporting purposes benefits more than one interim period, the cost or expense item may be allocated to those interim periods (see paragraph 270-10-45-9).
- b
- cArbitrary assignment of the amount of such costs to an interim period shall not be made.
- dGains and losses that arise in any interim period similar to those that would not be deferred at year end shall not be deferred to later interim periods within the same fiscal year.
270-10-45-9
A complete listing of examples of application of paragraphs is not practical; however, the following examples of applications may be helpful:
- aIf a cost that is expensed for annual reporting purposes clearly benefits two or more interim periods, each interim period shall be charged for an appropriate portion of the annual cost by the use of accruals or deferrals.
- bIf quantity discounts are allowed to customers based upon annual sales volume, the amount of such discounts charged to each interim period shall be based on the sales to customers during the interim period in relation to estimated annual sales.
- cProperty taxes (and similar costs such as interest and rent) may be accrued or deferred at annual reporting date, to achieve a full year's charge of taxes to costs and expenses. Similar procedures shall be adopted at each interim reporting date to provide an appropriate cost in each period.
- dAdvertising costs may be deferred within a fiscal year if the benefits of an expenditure made clearly extend beyond the interim period in which the expenditure is made. Advertising costs may be accrued and assigned to interim periods in relation to sales prior to the time the service is received if the advertising program is clearly implicit in the sales arrangement.
270-10-45-10
The amounts of certain costs and expenses are frequently subjected to year-end adjustments even though they can be reasonably approximated at interim dates. To the extent possible such adjustments should be estimated and the estimated costs and expenses assigned to interim periods so that the interim periods bear a reasonable portion of the anticipated annual amount. Examples of such items include inventory shrinkage, allowance for uncollectible accounts, allowance for quantity discounts, and discretionary year-end bonuses.
Seasonal Revenue, Costs, or Expenses
270-10-45-11
Revenues of certain entities are subject to material seasonal variations. To avoid the possibility that interim results with material seasonal variations may be taken as fairly indicative of the estimated results for a full fiscal year, such entities shall disclose the seasonal nature of their activities, and consider supplementing their interim reports with information for 12-month periods ended at the interim date for the current and preceding years.
Unusual or Infrequent Items and Disposals of Components
270-10-45-11A
Effects of disposals of a component of an entity and unusual or infrequently occurring transactions and events that are material with respect to the operating results of the interim period shall be reported separately. Gains or losses from disposal of a component of an entity and unusual or infrequently occurring items shall not be prorated over the balance of the fiscal year.
Accounting Changes in Interim Periods
270-10-45-12
Each report of interim financial information shall indicate any change in accounting principles, change in practices, or change in the reporting entity from those applied in any of the following:
Each report of interim financial information shall indicate any change in accounting principles or practices from those applied in any of the following:
- aThe comparable interim period of the prior annual period
- bThe preceding interim periods in the current annual period
- cThe prior annual report.
Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance:
105-10-65-7| Editor's Note: The pending content for paragraph 270-10-45-12 linked to paragraph 105-10-65-7 will be removed upon transition of paragraph 270-10-65-1. |
- aThe comparable interim period of the prior annual period
- bThe preceding interim periods in the current annual period
- cThe prior annual report.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1Interim financial statements and notes in accordance with GAAP shall indicate any change in accounting principles, change in practices, or change in the reporting entityfrom those applied in any of the following: - aThe comparable interim period of the prior annual period
- bThe preceding interim periods in the current annual period
- cThe prior annual financial statements.
270-10-45-13
Changes in an interim or annual accounting practice or policy made in an interim period shall be reported in the period in which the change is made, in accordance with the provisions of Topic 250.
270-10-45-14
The effect of a change in accounting estimate, including a change in the estimated effective annual tax rate, shall be accounted for in the period in which the change in estimate is made. No restatement of previously reported interim information shall be made for changes in estimates, but the effect on earnings of a change in estimate made in a current interim period shall be reported in the current and subsequent interim periods, if material in relation to any period presented and shall continue to be reported in the interim financial information of the subsequent year for as many periods as necessary to avoid misleading comparisons. Such disclosure shall conform with paragraph 250-10-50-4.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The effect of a change in accounting estimate, including a change in the estimated effective annual tax rate, shall be accounted for in the period in which the change in estimate is made. No restatement of previously issued interim financial statements and notes in accordance with GAAP shall be made for changes in estimates, but the effect on earnings of a change in estimate made in a current interim period shall be reported in the current and subsequent interim periods, if material in relation to any period presented and shall continue to be reported in the interim financial statements and notes in accordance with GAAP of the subsequent year for as many periods as necessary to avoid misleading comparisons. Such disclosure shall conform with paragraph 250-10-50-4. 270-10-45-15
Whenever possible, entities should adopt any accounting changes during the first interim period of a fiscal year. Changes in accounting principles and practices adopted after the first interim period in a fiscal year tend to obscure operating results and complicate disclosure of interim financial information.
270-10-45-16
As indicated in paragraph 250-10-45-27, in determining materiality for the purpose of reporting the correction of an error, amounts shall be related to the estimated income for the full fiscal year and also to the effect on the trend of earnings. Changes that are material with respect to an interim period but not material with respect to the estimated income for the full fiscal year or to the trend of earnings shall be separately disclosed in the interim period.
Adjustments Related to Prior Interim Periods of the Current Fiscal Year
270-10-45-17
As indicated in paragraph 250-10-45-25, an adjustment related to prior interim periods of the current fiscal year is an adjustment or settlement of litigation or similar claims, of income taxes (except for the effects of retroactive tax legislation), of renegotiation proceedings, or of utility revenue under rate-making processes provided that the adjustment or settlement meets all of the following criteria:
- aThe effect of the adjustment or settlement is material in relation to income from continuing operations of the current fiscal year or in relation to the trend of income from continuing operations or is material by other appropriate criteria.
- bAll or part of the adjustment or settlement can be specifically identified with and is directly related to business activities of specific prior interim periods of the current fiscal year.
- cThe amount of the adjustment or settlement could not be reasonably estimated prior to the current interim period but becomes reasonably estimable in the current interim period.
270-10-45-18
As indicated in paragraph 250-10-45-26, if an item of profit or loss occurs in other than the first interim period of the entity's fiscal year and all or a part of the item of profit or loss is an adjustment related to prior interim periods of the current fiscal year, as defined in the preceding paragraph, the item shall be reported as follows:
- aThe portion of the item that is directly related to business activities of the entity during the current interim period, if any, shall be included in the determination of net income for that period.
- bPrior interim periods of the current fiscal year shall be restated to include the portion of the item that is directly related to business activities of the entity during each prior interim period in the determination of net income for that period.
- cThe portion of the item that is directly related to business activities of the entity during prior fiscal years, if any, shall be included in the determination of net income of the first interim period of the current fiscal year.
Guidance Related to Presentation of Other Topics at Interim Dates
270-10-45-19
The following may not represent all references to interim reporting:
The following may not represent all references to interim reporting:
- aFor accounting changes, see paragraphs .
- bFor comprehensive income, see paragraph 220-10-45-18.
- cFor incurred but not reported liability and interim reporting, see paragraphs and 720-20-35-8.
- dFor income tax provisions, see Subtopic 740-270.
- eFor inventory, see paragraphs 330-10-55-2 and 610-30-25-3.
- fFor pensions and other postretirement benefits, see paragraphs and 715-60-35-40.
Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance:
105-10-65-7| Editor's Note: The pending content for paragraph 270-10-45-19 linked to paragraph 105-10-65-7 will be removed upon transition of paragraph 270-10-65-1. |
- aFor accounting changes, see paragraphs and 250-10-45-21.
- bFor comprehensive income, see paragraph 220-10-45-18.
- cFor incurred but not reported liability and interim reporting, see paragraphs and 720-20-35-8.
- dFor income tax provisions, see Subtopic 740-270.
- eFor inventory, see paragraphs 330-10-55-2 and 610-30-25-3.
- fFor pensions and other postretirement benefits, see paragraphs and 715-60-35-40.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following may not represent all references to interim reporting:- aFor accounting changes, see paragraphs and 250-10-45-21.
- bFor comprehensive income, see paragraph 220-10-45-18.
- cFor incurred but not reported liability and interim reporting, see paragraphs and 720-20-35-8.
- dFor income tax provisions, see Subtopic 740-270.
- eFor inventory, see paragraphs 330-10-55-2 and 610-30-25-3.
- fFor pensions and other postretirement benefits, see paragraphs and 715-60-35-40.
- gFor evaluation of a going concern, see paragraphs .
Form and Content of Interim Financial Statements and Notes
270-10-45-20
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1When preparing interim financial statements and notes in accordance with GAAP (including condensed statements), a Securities and Exchange Commission registrant (SEC registrant) shall refer to the applicable form and content of interim financial statements for SEC registrants. For example, see Regulation S-X Rule 10-01 (17 CFR 210.10-01) and Regulation S-X Rule 8-03 (17 CFR 210.8-03) (paragraph 270-10-S45-2).270-10-45-21
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1An entity that is not an SEC registrant may issue interim financial statements and notes in accordance with GAAP. When those financial statements are issued, the entity may present either of the following:- aFinancial statements presented using the same level of aggregation as the annual financial statements and notes subject to applicable annual disclosure requirements in GAAP
- bFinancial statements that are presented at a level more aggregated than the annual financial statements or that have limited notes subject to the disclosure requirements in this Topic or both (condensed statements).
270-10-45-22
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1If an entity that is not an SEC registrant chooses to present condensed statements in accordance with paragraph 270-10-45-21(b), the entity shall follow the following form and content guidance:- aFor the statement of financial position at the end of the reporting period, an entity shall include separate captions for each balance sheet component presented in the annual financial statements that is 10 percent or more of total assets. An entity also shall separately present cash and retained earnings regardless of the relative significance to total assets. An entity that presents a classified statement of financial position at the end of the annual reporting period shall present totals for current assets and current liabilities.
- bFor the statement of earnings for the reporting period, an entity shall include net sales or gross revenue and present each cost and expense category presented in the annual financial statements that exceeds 20 percent of sales or gross revenues (financial institutions shall substitute net interest income for sales). An entity also shall present the provision for income taxes and discontinued operations.
- cFor the statement of cash flows for the reporting period, an entity shall present totals for each category of cash flow activities (operating, investing, and financing) as well as cash at the beginning and end of each period and the increase or decrease in such balance.
- dFor investments by and distributions to owners for the reporting period, an entity shall present (in a note or a separate statement) an analysis of the changes in each caption presented in the statement of financial position. The analysis of changes shall be presented in the form of a reconciliation of the beginning balance to the ending balance for the reporting period. An entity also shall separately present investments by and distributions to owners.
270-10-45-23
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1An entity that is not an SEC registrant that chooses to apply the guidance in Regulation S-X Rule 10-01(a) (17 CFR 210.10-01(a)) or Regulation S-X Rule 8-03(a) (17 CFR 210.8-03(a)) is considered to be in compliance with the content requirements for condensed statements in paragraph 270-10-45-22.270-10-45-24
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1Condensed statements can be provided only if the previous annual financial statements have been issued (or the financial statements have been made available for issuance).270-10-45-25
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1If a not-for-profit entity presents condensed statements, the following requirements shall apply:- aNet assets with donor restrictions and net assets without donor restrictions shall be presented regardless of relative significance to total net assets in the statement of financial position.
- bThe required disclosure of expenses by nature and function may be condensed in accordance with the guidance in paragraphs , whether presented on the face of the statement of activities, as a separate schedule in the notes to financial statements, or in a separate financial statement.
- cThe requirement to provide a separate statement of changes in investments by and distributions to owners or disclosures explaining that such changes are not applicable.
270-10-50Disclosure
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Disclosure of Summarized Interim Financial Data by Publicly Traded Companies
270-10-50-1
Many publicly traded companies report summarized financial information at periodic interim dates in considerably less detail than that provided in annual financial statements. While this information provides more timely information than would result if complete financial statements were issued at the end of each interim period, the timeliness of presentation may be partially offset by a reduction in detail in the information provided. As a result, certain guides as to minimum disclosure are desirable. (It should be recognized that the minimum disclosures of summarized interim financial data required of publicly traded companies do not constitute a fair presentation of financial position and results of operations in conformity with generally accepted accounting principles [GAAP].) If publicly traded companies report summarized financial information at interim dates (including reports on fourth quarters), the following data should be reported, as a minimum:
Paragraph superseded by Accounting Standards Update No. 2025-11.
Many publicly traded companies report summarized financial information at periodic interim dates in considerably less detail than that provided in annual financial statements. While this information provides more timely information than would result if complete financial statements were issued at the end of each interim period, the timeliness of presentation may be partially offset by a reduction in detail in the information provided. As a result, certain guides as to minimum disclosure are desirable. (It should be recognized that the minimum disclosures of summarized interim financial data required of publicly traded companies do not constitute a fair presentation of financial position and results of operations in conformity with generally accepted accounting principles [GAAP].) If publicly traded companies report summarized financial information at interim dates (including reports on fourth quarters), the following data should be reported, as a minimum:
- aSales or gross revenues, provision for income taxes, net income, and comprehensive income
- bBasic and diluted earnings per share data for each period presented, determined in accordance with the provisions of Topic 260
- cSeasonal revenue, costs, or expenses (see paragraph 270-10-45-11)
- dSignificant changes in estimates or provisions for income taxes (see paragraphs 740-270-30-2, 740-270-30-6, and 740-270-30-8)
- eDisposal of a component of an entity and unusual or infrequently occurring items (see paragraphs 270-10-45-11A and 270-10-50-5)
- fContingent items (see paragraph 270-10-50-6)
- g
- hSignificant changes in financial position (see paragraph 270-10-50-4)
- iAll of the information about reportable segments required by paragraph 280-10-50-32, including provisions related to the recasting of segment information in previously issued financial statements.
- 1Subparagraph superseded by Accounting Standards Update No. 2023-07.
- 2Subparagraph superseded by Accounting Standards Update No. 2023-07.
- 3Subparagraph superseded by Accounting Standards Update No. 2023-07.
- 4Subparagraph superseded by Accounting Standards Update No. 2023-07.
- 5Subparagraph superseded by Accounting Standards Update No. 2023-07.
- 6Subparagraph superseded by Accounting Standards Update No. 2023-07.
- 1
- jAll of the following information about defined benefit pension plans and other defined benefit postretirement benefit plans, disclosed for all periods presented pursuant to the provisions of Subtopic 715-20:
- 1The amount of net periodic benefit cost recognized, for each period for which a statement of income is presented, showing separately the service cost component, the interest cost component, the expected return on plan assets for the period, the gain or loss component, the prior service cost or credit component, the transition asset or obligation component, and the gain or loss recognized due to a settlement or curtailment
- 2The total amount of the employer's contributions paid, and expected to be paid, during the current fiscal year, if significantly different from amounts previously disclosed pursuant to paragraph 715-20-50-1. Estimated contributions may be presented in the aggregate combining all of the following:
- iContributions required by funding regulations or laws
- iiDiscretionary contributions
- iiiNoncash contributions.
- i
- 1
- kThe information about the use of fair value to measure assets and liabilities recognized in the statement of financial position pursuant to Section 820-10-50
- l
- mThe information about financial instruments as required by Section 825-10-50
- nThe information about certain investments in debt and equity securities as required by Sections 320-10-50, 321-10-50, and 942-320-50
- o
- pAll of the following information about the credit quality of financial assets and the allowance for credit losses determined in accordance with the provisions of Subtopic 326-20 on financial instruments measured at amortized cost:
- 1Nonaccrual and past due financial assets (see paragraphs )
- 2Allowance for expected credit losses related to financial assets (see paragraphs )
- 3
- 4Credit-quality information related to instruments within the scope of Subtopic 326-20 (see paragraphs )
- 5Modifications of financing receivables (see paragraphs ).
- 1
- qThe gross information and net information required by paragraphs .
- rThe information about changes in accumulated other comprehensive income required by paragraphs 220-10-45-14A and 220-10-45-17 through 45-17B.
- sThe carrying amount of foreclosed residential real estate property as required by the last sentence of paragraph 310-10-50-11 and the amount of loans in the process of foreclosure as required by paragraph 310-10-50-35.
Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance:
105-10-65-7| Editor's Note: The pending content for paragraph 270-10-50-1 linked to paragraph 105-10-65-7 will be removed upon transition of paragraph 270-10-65-1. |
- aSales or gross revenues, provision for income taxes, net income, and comprehensive income
- bBasic and diluted earnings per share data for each period presented, determined in accordance with the provisions of Topic 260
- cSeasonal revenue, costs, or expenses (see paragraph 270-10-45-11)
- dSignificant changes in estimates or provisions for income taxes (see paragraphs 740-270-30-2, 740-270-30-6, and 740-270-30-8)
- eDisposal of a component of an entity and unusual or infrequently occurring items (see paragraphs 270-10-45-11A and 270-10-50-5)
- fContingent items (see paragraph 270-10-50-6)
- g
- hSignificant changes in financial position (see paragraph 270-10-50-4)
- iAll of the information about reportable segments required by paragraph 280-10-50-32, including provisions related to the recasting of segment information in previously issued financial statements.
- 1Subparagraph superseded by Accounting Standards Update No. 2023-07.
- 2Subparagraph superseded by Accounting Standards Update No. 2023-07.
- 3Subparagraph superseded by Accounting Standards Update No. 2023-07.
- 4Subparagraph superseded by Accounting Standards Update No. 2023-07.
- 5Subparagraph superseded by Accounting Standards Update No. 2023-07.
- 6Subparagraph superseded by Accounting Standards Update No. 2023-07.
- 1
- jAll of the following information about defined benefit pension plans and other defined benefit postretirement benefit plans, disclosed for all periods presented pursuant to the provisions of Subtopic 715-20:
- 1The amount of net periodic benefit cost recognized, for each period for which a statement of income is presented, showing separately the service cost component, the interest cost component, the expected return on plan assets for the period, the gain or loss component, the prior service cost or credit component, the transition asset or obligation component, and the gain or loss recognized due to a settlement or curtailment
- 2The total amount of the employer's contributions paid, and expected to be paid, during the current fiscal year, if significantly different from amounts previously disclosed pursuant to paragraph 715-20-50-1. Estimated contributions may be presented in the aggregate combining all of the following:
- iContributions required by funding regulations or laws
- iiDiscretionary contributions
- iiiNoncash contributions.
- i
- 1
- kThe information about the use of fair value to measure assets and liabilities recognized in the statement of financial position pursuant to Section 820-10-50
- l
- mThe information about financial instruments as required by Section 825-10-50
- nThe information about certain investments in debt and equity securities as required by Sections 320-10-50, 321-10-50, and 942-320-50
- o
- pAll of the following information about the credit quality of financial assets and the allowance for credit losses determined in accordance with the provisions of Subtopic 326-20 on financial instruments measured at amortized cost:
- 1Nonaccrual and past due financial assets (see paragraphs )
- 2Allowance for expected credit losses related to financial assets (see paragraphs )
- 3
- 4Credit-quality information related to instruments within the scope of Subtopic 326-20 (see paragraphs )
- 5Modifications of financing receivables (see paragraphs ).
- 1
- qThe gross information and net information required by paragraphs .
- rThe information about changes in accumulated other comprehensive income required by paragraphs 220-10-45-14A and 220-10-45-17 through 45-17B.
- sThe carrying amount of foreclosed residential real estate property as required by the last sentence of paragraph 310-10-50-11 and the amount of loans in the process of foreclosure as required by paragraph 310-10-50-35.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1| Editor's Note: Paragraph 270-10-50-1 will be superseded upon transition, together with its heading: |
| > Disclosure of Summarized Interim Financial Data by Publicly Traded Companies |
270-10-50-1A
Consistent with paragraph 270-10-50-1, a public business entity, a not-for-profit entity that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market, or an employee benefit plan that files or furnishes financial statements with or to the Securities and Exchange Commission, shall disclose all of the following information about revenue from contracts with customers consistent with the guidance in Topic 606:
- aA disaggregation of revenue for the period, see paragraphs and paragraphs .
- bThe opening and closing balances of receivables, contract assets, and contract liabilities from contracts with customers (if not otherwise separately presented or disclosed), see paragraph 606-10-50-8(a).
- cRevenue recognized in the reporting period that was included in the contract liability balance at the beginning of the period, see paragraph 606-10-50-8(b).
- dRevenue recognized in the reporting period from performance obligations satisfied (or partially satisfied) in previous periods (for example, changes in transaction price), see paragraph 606-10-50-12A.
- eInformation about the entity's remaining performance obligations as of the end of the reporting period, see paragraphs .
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1Paragraph superseded by Accounting Standards Update No. 2025-11.270-10-50-1B
Costs and expenses incurred in an interim period that cannot be readily identified with the activities or benefits of other interim periods shall be charged to the interim period in which incurred. Disclosure in the notes to financial statements shall be made as to the nature and amount of such costs unless items of a comparable nature are included in both the current interim period and in the corresponding interim period of the preceding year. (See paragraph 270-10-45-8(b).)
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1Paragraph superseded by Accounting Standards Update No. 2025-11.270-10-50-2
If interim financial data and disclosures are not separately reported for the fourth quarter, users of the interim financial information often make inferences about that quarter by subtracting data based on the third quarter interim report from the annual results. In the absence of a separate fourth quarter report or disclosure of the results (as outlined in the preceding paragraph) for that quarter in the annual report, disposals of components of an entity and unusual or infrequently occurring items recognized in the fourth quarter, as well as the aggregate effect of year-end adjustments that are material to the results of that quarter (see paragraphs 270-10-05-2 and 270-10-45-10) shall be disclosed in the annual report in a note to the annual financial statements. If a publicly traded company that regularly reports interim information makes an accounting change during the fourth quarter of its fiscal year and does not report the data specified by the preceding paragraph in a separate fourth quarter report or in its annual report, the disclosures about the effect of the accounting change on interim periods that are required by paragraphs or by paragraph 250-10-45-15, as appropriate, shall be made in a note to the annual financial statements for the fiscal year in which the change is made.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1Paragraph superseded by Accounting Standards Update No. 2025-11.270-10-50-3
Disclosure of the impact of the financial results for interim periods of the matters discussed in paragraphs and is desirable for as many subsequent periods as necessary to keep the reader fully informed. There is a presumption that users of summarized interim financial data will have read the latest published annual report, including the financial disclosures required by generally accepted accounting principles (GAAP) and management's commentary concerning the annual financial results, and that the summarized interim data will be viewed in that context. In this connection, management is encouraged to provide commentary relating to the effects of significant events upon the interim financial results.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1Paragraph superseded by Accounting Standards Update No. 2025-11.270-10-50-4
Publicly traded companies are encouraged to publish balance sheet and cash flow data at interim dates since these data often assist users of the interim financial information in their understanding and interpretation of the income data reported. If condensed interim balance sheet information or cash flow data are not presented at interim reporting dates, significant changes since the last reporting period with respect to liquid assets, net working capital, long-term liabilities, or stockholders' equity shall be disclosed.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1Paragraph superseded by Accounting Standards Update No. 2025-11.Unusual or Infrequent Items
270-10-50-5
Paragraph superseded by Accounting Standards Update No. 2025-11.
Matters such as unusual seasonal results, business combinations, and acquisitions by not-for-profit entities shall be disclosed to provide information needed for a proper understanding of interim financial reports.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1| Editor's Note: Paragraph 270-10-50-5 will be superseded upon transition, together with its heading. |
| > Unusual or Infrequent Items |
Contingencies
270-10-50-6
Paragraph superseded by Accounting Standards Update No. 2025-11.
Contingencies and other uncertainties that could be expected to affect the fairness of presentation of financial data at an interim date shall be disclosed in interim reports in the same manner required for annual reports. Such disclosures shall be repeated in interim and annual reports until the contingencies have been removed, resolved, or have become immaterial. The significance of a contingency or uncertainty should be judged in relation to annual financial statements. Disclosures of such items shall include, but not be limited to, those matters that form the basis of a qualification of an independent auditor's report.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1| Editor's Note: Paragraph 270-10-50-6 will be superseded upon transition, together with its heading. |
| > Contingencies |
Leases
270-10-50-6A
Paragraph superseded by Accounting Standards Update No. 2025-11.
A lessor shall disclose a table of all lease-related income items in its interim financial statements (see paragraph 842-30-50-5 for lease-related income items).
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1| Editor's Note: Paragraph 270-10-50-6A will be superseded upon transition, together with its heading. |
| > Leases |
Guidance Related to Disclosure of Other Topics at Interim Dates
270-10-50-7
Paragraph superseded by Accounting Standards Update No. 2025-11.
The following may not represent all references to interim disclosure:
- aFor business combinations and combinations accounted for by not-for-profit entities, see Sections 805-10-50, 805-20-50, 805-30-50, 805-740-50, and 958-805-50.
- bFor compensation-related costs, see paragraphs 715-60-50-3 and 715-60-50-6.
- cFor disclosures required for entities with oil- and gas-producing activities, see paragraph 932-270-50-1.
- dFor disclosures related to prior interim periods of the current fiscal year, see paragraph 250-10-50-11.
- eFor fair value requirements, see Section 820-10-50.
- fFor guarantors, see Section 460-10-50.
- gFor pensions and other postretirement benefits, see paragraphs .
- hFor reportable segments, see paragraphs 280-10-50-39 and 280-10-55-16.
- iFor suspended well costs and interim reporting, see Section 932-235-50.
- jFor applicability of disclosure requirements related to risks and uncertainties, see paragraph 275-10-15-3.
- kFor discontinued operations, see paragraphs .
- lFor disposals of individually significant components of an entity, see paragraph 360-10-50-3A.
- llFor disclosure requirements on the amount of obligations outstanding under a supplier finance program, see paragraph 405-50-50-4.
- mFor insurance entities that account for short-duration contracts, see paragraphs 944-40-50-3 and 944-40-50-4E.
- nFor insurance entities that account for long-duration contracts, see paragraphs , 944-40-50-6 through 50-7C, and .
- oFor disclosure requirements on investments that generate income tax credits and other income tax benefits from a tax credit program, see paragraphs .
- pFor disclosure requirements for crypto assets, see paragraphs 350-60-50-1 and .
Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance:
220-40-65-1The following may not represent all references to interim disclosure: - aFor business combinations and combinations accounted for by not-for-profit entities, see Sections 805-10-50, 805-20-50, 805-30-50, 805-740-50, and 958-805-50.
- bFor compensation-related costs, see paragraphs 715-60-50-3 and 715-60-50-6.
- cFor disclosures required for entities with oil- and gas-producing activities, see paragraph 932-270-50-1.
- dFor disclosures related to prior interim periods of the current fiscal year, see paragraph 250-10-50-11.
- eFor fair value requirements, see Section 820-10-50.
- fFor guarantors, see Section 460-10-50.
- gFor pensions and other postretirement benefits, see paragraphs .
- hFor reportable segments, see paragraphs 280-10-50-39 and 280-10-55-16.
- iFor suspended well costs and interim reporting, see Section 932-235-50.
- jFor applicability of disclosure requirements related to risks and uncertainties, see paragraph 275-10-15-3.
- kFor discontinued operations, see paragraphs .
- lFor disposals of individually significant components of an entity, see paragraph 360-10-50-3A.
- llFor disclosure requirements on the amount of obligations outstanding under a supplier finance program, see paragraph 405-50-50-4.
- mFor insurance entities that account for short-duration contracts, see paragraphs 944-40-50-3 and 944-40-50-4E.
- nFor insurance entities that account for long-duration contracts, see paragraphs , 944-40-50-6 through 50-7C, and .
- oFor disclosure requirements on investments that generate income tax credits and other income tax benefits from a tax credit program, see paragraphs .
- pFor disclosure requirements for crypto assets, see paragraphs 350-60-50-1 and .
- qFor income statement expense disaggregation, see Subtopic 220-40.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1| Editor's Note: Paragraph 270-10-50-7 will be superseded upon transition, together with its heading. |
| > Guidance Related to Disclosure of Other Topics at Interim Dates |
270-10-50-8
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1This Section provides the following disclosure guidance for interim financial statements and notes in accordance with generally accepted accounting principles (GAAP):- aDisclosure requirements of this Topic
- bInterim disclosure requirements of other Topics for condensed statements
- cDisclosure principle.
Disclosure Requirements of This Topic
270-10-50-9
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1All entities shall disclose the following information in their interim financial statements and notes in accordance with GAAP:- aSales or gross revenues, provision for income taxes, net income, and comprehensive income
- bSignificant changes in estimates or provisions for income taxes (see paragraphs 740-270-30-2, 740-270-30-6, and 740-270-30-8)
- cThe nature and amount of costs and expenses incurred in an interim period that cannot be readily identified with the activities or benefits of other interim periods unless items of a comparable nature are included in both the current interim period and in the corresponding interim period of the preceding year.
- dInformation needed for a proper understanding of the impact of unusual or infrequent items such as unusual seasonal results.
- eThe seasonal nature of activities for an entity with material seasonal variations in revenue, costs, or expenses.
- fWhen an entity uses estimated gross profit rates to determine the cost of goods sold during interim periods or uses other methods different from those used at annual inventory dates, the method used to determine the cost of goods sold at the interim date and any significant adjustments that result from reconciliations with the annual physical inventory.
- gError corrections that are material with respect to an interim period but not material with respect to the estimated income for the full fiscal year or to the trend of earnings, as indicated in paragraph 250-10-45-27.
- hA statement that interim financial statements are to be read in conjunction with the most recently issued annual financial statements and notes in accordance with GAAP. This disclosure is applicable only for entities that are not Securities and Exchange Commission (SEC) registrants and that provide condensed statements in accordance with the guidance in paragraphs .
270-10-50-10
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1If interim financial statements and notes in accordance with GAAP are not separately reported for the fourth quarter, users of the interim financial information often make inferences about that quarter by subtracting data based on the third quarter interim financial statements and notes in accordance with GAAP from the annual results. In the absence of separate fourth quarter financial statements, disposals of components of an entity and unusual or infrequently occurring items recognized in the fourth quarter, as well as the aggregate effect of year-end adjustments that are material to the results of that quarter (see paragraphs 270-10-05-2 and 270-10-45-10), shall be disclosed in a note to the annual financial statements. If an entity that regularly provides interim financial statements and notes in accordance with GAAP makes an accounting change during the fourth quarter of its fiscal year and does not report the data specified by paragraph 270-10-50-9in a separate fourth quarter report or in its annual report, the disclosures about the effect of the accounting change on interim periods that are required by paragraphs or by paragraph 250-10-45-15, as appropriate, shall be made in a note to the annual financial statements for the fiscal year in which the change is made.Interim Disclosure Requirements of Other Topics for Condensed Statements
270-10-50-11
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1Paragraphs include a list of interim disclosure requirements for condensed statements (see paragraphs for form and content guidance for condensed statements). While this Section provides a list of the interim disclosure requirements, an entity should refer to each referenced Topic to determine the scope of the disclosures and related requirements. Throughout the Codification there are specific disclosures that are required for an event or a transaction. When an event or transaction occurs during an interim period, an entity shall consider whether incremental disclosures are required as a result of the assessment of the disclosure principle beginning in paragraph 270-10-50-67 and, if applicable, apply the disclosure requirements of the related Topic.270-10-50-12
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements:Paragraph Number |
| 205-10-50-1 |
270-10-50-13
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements:270-10-50-14
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements:Paragraph Number |
270-10-50-15
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements:Paragraph Number |
270-10-50-16
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements:Paragraph Number |
270-10-50-17
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements:Paragraph Number |
270-10-50-18
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements:270-10-50-19
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements:270-10-50-20
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-21
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: 270-10-50-22
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-23
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: 270-10-50-24
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-25
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-26
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-27
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-28
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-29
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-30
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-31
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-32
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-33
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-34
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-35
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-36
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-37
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-38
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-39
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-40
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-41
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-42
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-43
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: 270-10-50-44
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: 270-10-50-45
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-46
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-47
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-48
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: 270-10-50-49
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: 270-10-50-50
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-51
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-52
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-53
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-54
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-55
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-56
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-57
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-58
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: 270-10-50-59
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-60
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-61
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-62
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-63
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-64
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-65
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Paragraph Number |
270-10-50-66
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1The following table includes disclosure requirements for condensed statements: Disclosure Principle
270-10-50-67
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1Interim financial statements and notes in accordance with GAAP shall include disclosures either on the face of the financial statements or in accompanying footnotes sufficient so as to make interim financial statements and notes in accordance with GAAP presented not misleading. An entity that is an SEC registrant may presume that users of interim financial statements and notes in accordance with GAAP have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. (Paragraphs provide guidance for an entity that is not an SEC registrant.) Accordingly, footnote disclosure which would substantially duplicate the disclosure contained in the most recent annual report to security holders or latest annual financial statements, such as a statement of significant accounting policies and practices and details of accounts which have not changed significantly in amount or composition since the end of the most recently completed fiscal year, may be omitted.270-10-50-68
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1However, disclosure shall be provided where events subsequent to the end of the most recent fiscal year have occurred which have a material impact on the entity. Disclosures shall encompass (but not be limited to), for example, significant changes since the end of the most recently completed fiscal year in such items as accounting principles and practices; estimates inherent in the preparation of financial statements; status of long-term contracts; capitalization including significant new borrowings or modification of existing financing arrangements; and the reporting entity resulting from business combinations or dispositions. Notwithstanding the above, where material contingencies exist, disclosure of such matters shall be provided even though a significant change since year-end may not have occurred.270-10-50-69
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1Contingencies and other uncertainties that could be expected to affect the fairness of presentation of financial statements at an interim date shall be disclosed in interim reporting periods in the same manner required for annual reporting periods. Such disclosures shall be repeated in interim and annual financial statements and notes in accordance with GAAP until the contingencies have been removed, resolved, or have become immaterial. The significance of a contingency or uncertainty should be judged in relation to annual financial statements.270-10-50-70
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1An entity that provides disclosure about events since the end of the last annual reporting period that have a material impact on the entity (for example, an impairment or a restructuring) that occur during an interim period in accordance with paragraph 270-10-50-68 shall consider the annual disclosure requirements in other Topics as the basis for the relevant disclosures for the current interim period. The relevant disclosures for the current interim period shall focus on the event that should be captured under the disclosure principle. Therefore, all of the annual disclosure requirements in those other Topics may not be relevant.270-10-60Relationships
Source downloaded: .Record version ea44d9c55a04. Effective date must be checked in the source.
Fair Value Measurements and Disclosures
270-10-60-1
Paragraph superseded by Accounting Standards Update No. 2025-11.
For additional disclosure guidance for the reporting entity, see Section 820-10-50.
Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance:
270-10-65-1| Editor's Note: Paragraph 270-10-60-1 will be superseded upon transition, together with its heading. |
| > Fair Value Measurements and Disclosures |
270-10-65Transition and Open Effective Date Information
Source downloaded: .Record version 2cd7dfc73e34. Effective date must be checked in the source.
Transition Related to Accounting Standards Update No. 2025-11, <em class="ph i">Interim Reporting (Topic 270): Narrow-Scope Improvements</em>
270-10-65-1
The following represents the transition and effective date information related to Accounting Standards Update No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements:
Effective date and early adoption
- a A public business entity shall apply the pending content that links to this paragraph for interim reporting periods within annual reporting periods beginning after December 15, 2027. An entity other than a public business entity shall apply the pending content that links to this paragraph for interim reporting periods within annual reporting periods beginning after December 15, 2028.
- b Early adoption of the pending content that links to this paragraph is permitted in any interim reporting period in which financial statements have not yet been issued or made available for issuance.
Transition method
- c An entity shall apply the pending content that links to this paragraph using one of the following transition methods:
- 1 Prospectively to interim financial statements and notes in accordance with generally accepted accounting principles (GAAP) issued for interim reporting periods beginning after the date of adoption. The disclosures required by the pending content that links to this paragraph do not need to be included in interim financial statements and notes in accordance with GAAP for interim reporting periods beginning before the date of adoption that are being presented for comparative purposes.
- 2 Retrospectively to any or all prior interim reporting periods presented in the interim financial statements and notes in accordance with GAAP.
- 1
270-10-S00StatusSEC
Source downloaded: .Record version 16f18f5b052a. Effective date must be checked in the source.
270-10-S00-1
The following table identifies the changes made to this Subtopic.
| Paragraph | Action | Accounting Standards Update | Date |
| 270-10-S99-1 | Amended | Accounting Standards Update No. 2020-09 | 10/22/2020 |
| 270-10-S99-1 | Amended | Accounting Standards Update No. 2019-07 | 07/26/2019 |
| 270-10-S99-1 | Amended | Accounting Standards Update No. 2012-03 | 08/27/2012 |
| 270-10-S99-1 | Amended | Accounting Standards Update No. 2010-21 | 08/02/2010 |
| 270-10-S99-2 | Amended | Accounting Standards Update No. 2010-22 | 08/19/2010 |
270-10-S45Other Presentation MattersSEC
Source downloaded: .Record version 958999188060. Effective date must be checked in the source.
Form and Content
270-10-S45-1
See paragraph 220-10-S99-1(d), Regulation S-X Rule 3-03(d), for requirements to reflect adjustments in interim financial statements.
270-10-S45-2
See paragraph 270-10-S99-1, Regulation S-X Rule 10-01, for requirements for form and content of interim financial statements. Smaller reporting companies, as defined in Item 10(f)(1) of Regulation S-K, should comply with the similar requirements in Regulation S-X Rule 8-03.
Separately Presented Captions Previously Combined
270-10-S45-3
See paragraph 270-10-S99-2, SAB Topic 6.G.2, Question 1, for SEC Staff views on separately presenting captions in the Form 10Q that were previously combined.
Separate Presentation of Inventory Components
270-10-S45-4
See paragraph 270-10-S99-2, SAB Topic 6.G.2.a, Question 3, for SEC Staff views regarding separate presentation of inventory components.
270-10-S50DisclosureSEC
Source downloaded: .Record version 3e6ba61cd882. Effective date must be checked in the source.
Inclusion of Certain Necessary Adjustments in Interim Financial Statements
270-10-S50-1
See paragraph 220-10-S99-1(d), Regulation S-X Rule 3-03(d), for disclosure requirements when including certain required adjustments in interim financial statements.
Required Various Disclosure in Interim Financial Statements
270-10-S50-2
See paragraph 270-10-S99-1(b), Regulation S-X Rule 10-01(b), for various disclosure requirements in interim financial statements. Smaller reporting companies, as defined in Item 10(f)(1) of Regulation S-K, should comply with the similar requirements in Regulation S-X Rule 8-03.
270-10-S55Implementation Guidance and IllustrationsSEC
Source downloaded: .Record version f49835c88136. Effective date must be checked in the source.
Computation of when Major Income Statement Captions May Be Combined
270-10-S55-1
See paragraph 270-10-S99-2, SAB Topic 6.G.2.a, Question 2, for SEC Staff views on the meaning of "net income" as used in the calculation of combining income statement captions for compliance with Regulation S-X Rules 10-01(a)(2) and (3).
Computation of Cash Flows Provided by Operations for the Three Most Recent Years
270-10-S55-2
See paragraph 270-10-S99-2, SAB Topic 6.G.2.a, Question 4, for SEC Staff views on the calculation of determining what sources and applications of cash and cash equivalents must be presented separately in order to comply with Regulation S-X Rule 10-01(a)(4).
270-10-S99SEC MaterialsSEC
Source downloaded: .Record version 64486d709687. Effective date must be checked in the source.
SEC Rules, Regulations, and Interpretations
270-10-S99-1
The following is the text of Regulation S-X Rule 10-01, Interim Financial Statements (17 CFR 210.10-01).
- (a) Condensed statements. Interim financial statements shall follow the general form and content of presentation prescribed by the other sections of this Regulation with the following exceptions:
- (1) Interim financial statements required by this rule need only be provided as to the registrant and its subsidiaries consolidated and may be unaudited. Separate statements of other entities which may otherwise be required by this regulation may be omitted.
- (2) Interim balance sheets shall include only major captions (i. e., numbered captions) prescribed by the applicable sections of this Regulation with the exception of inventories. Data as to raw materials, work in process and finished goods inventories shall be included either on the face of the balance sheet or in the notes to the financial statements, if applicable. Where any major balance sheet caption is less than 10% of total assets, and the amount in the caption has not increased or decreased by more than 25% since the end of the preceding fiscal year, the caption may be combined with others.
- (3) Interim statements of comprehensive income shall also include major captions prescribed by the applicable sections of part 210 of this chapter (Regulation S-X). When any major statement of comprehensive income (or statement of net income if comprehensive income is presented in two separate but consecutive financial statements) caption is less than 15% of average net income for the most recent three fiscal years and the amount in the caption has not increased or decreased by more than 20% as compared to the corresponding interim period of the preceding fiscal year, the caption may be combined with others. In calculating average net income, loss years should be excluded. If losses were incurred in each of the most recent three years, the average loss shall be used for purposes of this test. Notwithstanding these tests, §210.4-02 applies and de minimis amounts therefore need not be shown separately, except that registrants reporting under § 210.9 shall show investment securities gains or losses separately regardless of size.
- (4) The statement of cash flows may be abbreviated starting with a single figure of net cash flows from operating activities and showing cash changes from investing and financing activities individually only when they exceed 10% of the average of net cash flows from operating activities for the most recent three years. Notwithstanding this test, § 210.4-02 applies and de minimis amounts therefore need not be shown separately.
- (5) The interim financial information shall include disclosures either on the face of the financial statements or in accompanying footnotes sufficient so as to make the interim information presented not misleading. Registrants may presume that users of the interim financial information have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure which would substantially duplicate the disclosure contained in the most recent annual report to security holders or latest audited financial statements, such as a statement of significant accounting policies and practices, details of accounts which have not changed significantly in amount or composition since the end of the most recently completed fiscal year, and detailed disclosures prescribed by §210.4-08 may be omitted.
- (6) Detailed schedules otherwise required by this Regulation may be omitted for purposes of preparing interim financial statements.
- (7) Provide the information required by §210.3-04 for the current and comparative year-to-date periods, with subtotals for each interim period.
- (b) Other instructions as to content. The following additional instructions shall be applicable for purposes of preparing interim financial statements:
- (1) Summarized statement of comprehensive income information shall be given separately as to each subsidiary not consolidated or 50 percent or less owned persons or as to each group of such subsidiaries or fifty percent or less owned persons for which separate individual or group statements would otherwise be required for annual periods. Such summarized information, however, need not be furnished for any such unconsolidated subsidiary or person which would not be required pursuant to §240.13a-13 or §240.15d-13 of this chapter to file quarterly financial information with the Commission if it were a registrant.
- (2) The basis of the earnings per share computation shall be stated together with the number of shares used in the computation.
- (3) If, during the most recent interim period presented, the registrant or any of its consolidated subsidiaries entered into a combination between entities under common control, supplemental disclosure of the separate results of the combined entities for periods prior to the combination shall be given, with appropriate explanations.
- (4)-(5) [Reserved]
- (6) For filings on Form 10-Q (§249.308(a) of this chapter), a letter from the registrant's independent accountant shall be filed as an exhibit (in accordance with the provisions of 17 CFR 229.601 (Item 601 of Regulation S-K) in the first Form 10-Q after the date of an accounting change indicating whether or not the change is to an alternative principle which, in the accountant's judgment is preferable under the circumstances; except that no letter from the accountant need be filed when the change is made in response to a standard adopted by the Financial Accounting Standards Board that requires such change.
- (7) Any material retroactive prior period adjustment made during any period covered by the interim financial statements shall be disclosed, together with the effect thereof upon net income— total and per share—of any prior period included and upon the balance of retained earnings. If results of operations for any period presented have been adjusted retroactively by such an item subsequent to the initial reporting of such period, similar disclosure of the effect of the change shall be made.
- (8) Any unaudited interim financial statements furnished shall reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. A statement to that effect shall be included. If all such adjustments are of a normal recurring nature, a statement to that effect shall be made; otherwise, there shall be furnished information describing in appropriate detail the nature and amount of any adjustments other than normal recurring adjustments entering into the determination of the results shown.
- (9) The requirements of §210.3-10 are applicable to financial statements for a subsidiary of the registrant that issues securities guaranteed by the registrant or guarantees securities issued by the registrant. Disclosures about guarantors and issuers of guaranteed securities registered or being registered must be presented as required by §210.13-01.
- (10) Disclosures about a registrant's affiliates whose securities collateralize any class of securities registered or being registered and the related collateral arrangement must be presented as required by §210.13-02.
- [85 FR 22000, Apr. 20, 2020]
- (c) Periods to be covered. The periods for which interim financial statements are to be provided in registration statements are prescribed elsewhere in this Regulation (see §§ 210.3-01 and 3-02). For filings on Form 10-Q, financial statements shall be provided as set forth in this paragraph (c):
- (1) An interim balance sheet as of the end of the most recent fiscal quarter and a balance sheet as of the end of the preceding fiscal year shall be provided. The balance sheet as of the end of the preceding fiscal year may be condensed to the same degree as the interim balance sheet provided. An interim balance sheet as of the end of the corresponding fiscal quarter of the preceding fiscal year need not be provided unless necessary for an understanding of the impact of seasonal fluctuations on the registrant's financial condition.
- (2) Interim statements of comprehensive income shall be provided for the most recent fiscal quarter, for the period between the end of the preceding fiscal year and the end of the most recent fiscal quarter, and for the corresponding periods of the preceding fiscal year. Such statements may also be presented for the cumulative twelve month period ended during the most recent fiscal quarter and for the corresponding preceding period.
- (3) Interim statements of cash flows shall be provided for the period between the end of the preceding fiscal year and the end of the most recent fiscal quarter, and for the corresponding period of the preceding fiscal year. Such statements may also be presented for the cumulative twelve month period ended during the most recent fiscal quarter and for the corresponding preceding period.
- (4) Registrants engaged in seasonal production and sale of a single-crop agricultural commodity may provide interim statements of comprehensive income and cash flows for the twelve month period ended during the most recent fiscal quarter and for the corresponding preceding period in lieu of the year-to-date statements specified in paragraphs (c)(2) and (3) of this section.
- (d) Interim review by independent public accountant. Prior to filing, interim financial statements included in quarterly reports on Form 10-Q (17 CFR 249.308(a)) must be reviewed by an independent public accountant using applicable professional standards and procedures for conducting such reviews, as may be modified or supplemented by the Commission. If, in any filing, the company states that interim financial statements have been reviewed by an independent public accountant, a report of the accountant on the review must be filed with the interim financial statements.
- (e) Filing of other interim financial information in certain cases. The Commission may, upon the informal written request of the registrant, and where consistent with the protection of investors, permit the omission of any of the interim financial information herein required or the filing in substitution thereof of appropriate information of comparable character. The Commission may also by informal written notice require the filing of other information in addition to, or in substitution for, the interim information herein required in any case where such information is necessary or appropriate for an adequate presentation of the financial condition of any person for which interim financial information is required, or whose financial information is otherwise necessary for the protection of investors.
- [46 FR 12489, Feb. 17, 1981, as amended at 50 FR 25215, June 18, 1985; 50 FR 49533, Dec. 3, 1985; 57 FR 45293, Oct. 1, 1992; 64 FR 73401, Dec. 30, 1999; 73 FR 956, Jan. 4, 2008; 74 FR 18616, Apr. 23, 2009; 76 FR 50120, Aug. 12, 2011; 83 FR 50205, Oct. 4, 2018]
SEC Staff Guidance
270-10-S99-2
The following is the text of SAB Topic 6.G.2, Amendments to Form 10Q.
- a. Form of condensed financial statements.
- Facts: Rules 10-01(a)(2) and (3) of Regulation S-X provide that interim balance sheets and statements of income shall include only major captions (i. e., numbered captions) set forth in Regulation S-X, with the exception of inventories where data as to raw materials, work in process and finished goods shall be included, if applicable, either on the face of the balance sheet or in notes thereto. Where any major balance sheet caption is less than 10% of total assets and the amount in the caption has not increased or decreased by more than 25% since the end of the preceding fiscal year, the caption may be combined with others. When any major income statement caption is less than 15% of average net income attributable to the registrant for the most recent three fiscal years and the amount in the caption has not increased or decreased by more than 20% as compared to the corresponding interim period of the preceding fiscal year, the caption may be combined with others. Similarly, the statement of cash flows may be abbreviated, starting with a single figure of cash flows provided by operations and showing other changes individually only when they exceed 10% of the average of cash flows provided by operations for the most recent three years.
- Question 1: If a company previously combined captions in a Form 10-Q but is required to present such captions separately in the Form 10-Q for the current quarter, must it retroactively reclassify amounts included in the prior-year financial statements presented for comparative purposes to conform with the captions presented for the current-year quarter?
- Interpretive Response: Yes.
- Question 2: If a company uses the gross profit method or some other method to determine cost of goods sold for interim periods, will it be acceptable to state only that it is not practicable to determine components of inventory at interim periods?
- Interpretive Response: The staff believes disclosure of inventory components is important to investors. In reaching this decision the staff recognizes that registrants may not take inventories during interim periods and that managements, therefore, will have to estimate the inventory components. However, the staff believes that management will be able to make reasonable estimates of inventory components based upon their knowledge of the company's production cycle, the costs (labor and overhead) associated with this cycle as well as the relative sales and purchasing volume of the company.
- Question 3: If a company has years during which operations resulted in a net outflow of cash and cash equivalents, should it exclude such years from the computation of cash and cash equivalents provided by operations for the three most recent years in determining what sources and applications must be shown separately?
- Interpretive Response: Yes. Similar to the determination of average net income, if operations resulted in a net outflow of cash and cash equivalents during any year, such amount should be excluded in making the computation of cash flow provided by operations for the three most recent years unless operations resulted in a net outflow of cash and cash equivalents in all three years, in which case the average of the net outflow of cash and cash equivalents should be used for the test.