# ASC 855-10-S99: Subsequent Events — Overall — SEC 99 SEC Materials

Source: FASB Accounting Standards Codification, Basic View

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## ASC 855-10-S99: SEC 99 SEC Materials

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#### SEC Staff Guidance

##### [855-10-S99-1](https://asc.understandingaccounting.org/asc/855/10/#855-10-S99-1)

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The following is the text of SAB Topic 1.B.3, Other Matters.

-   Question: What is the staff's position with respect to dividends declared by the subsidiary subsequent to the balance sheet date?
    
-   Interpretive Response: The staff believes that such dividends either be given retroactive effect in the balance sheet with appropriate footnote disclosure, or reflected in a pro forma balance sheet. In addition, when the dividends are to be paid from the proceeds of the offering, the staff believes it is appropriate to include pro forma per share data (for the latest year and interim period only) giving effect to the number of shares whose proceeds were to be used to pay the dividend. A similar presentation is appropriate when dividends exceed earnings in the current year, even though the stated use of proceeds is other than for the payment of dividends. In these situations, pro forma per share data should give effect to the increase in the number of shares which, when multiplied by the offering price, would be sufficient to replace the capital in excess of earnings being withdrawn.

##### [855-10-S99-2](https://asc.understandingaccounting.org/asc/855/10/#855-10-S99-2)

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The following is the text of SEC Staff Announcement: [Issuance of Financial Statements](https://asc.understandingaccounting.org/glossary/i/#issuance-of-financial-statements "See paragraph 855-10-S99-2, SEC Staff Announcement: Issuance of Financial Statements, for SEC Staff views on when financial statements are deemed to be issued.").

-   In considering when financial statements have been issued, the SEC staff observed that Rules 10b-5 and 12b-20 under the Securities Exchange Act of 1934 and General Instruction C(3) to Form 10-K specify that financial statements must not be misleading as of the date they are filed with the Commission. For example, assume that a registrant widely distributes its financial statements but, before filing them with the Commission, the registrant or its auditor becomes aware of an event or transaction that existed at the date of the financial statements that causes those financial statements to be materially misleading. If a registrant does not amend those financial statements so that they are free of material misstatement or omissions when they are filed with the Commission, the registrant will be knowingly filing a false and misleading document. In addition, registrants are reminded of their responsibility to, at a minimum, disclose subsequent events, <sup class="ph sup">FN1</sup> while independent auditors are reminded of their responsibility to assess subsequent events <sup class="ph sup">FN2</sup> and evaluate the impact of the events or transactions on their audit report. <sup class="ph sup">FN3</sup>
    
    -   FN1 See AU Section 560, Subsequent Events, paragraphs 5 and 8 and Section 855-10-50.
        
    -   FN2 See AU 560 and AU Section 561, Subsequent Discovery of Facts Existing at Date of the Auditor's Report.
        
    -   FN3 See AU Section 530, Dating of the Independent Auditor's Report, and AU 560, paragraph 9.
        
-   A registrant and its independent auditor have responsibilities with regard to post-balance-sheet-date subsequent events, as well as the application of authoritative literature applicable to such events. See Topic 855 and AU 560, Subsequent Events, paragraph 3.
    
-   Generally, the staff believes that financial statements are "issued" as of the date they are distributed for general use and reliance in a form and format that complies with generally accepted accounting principles (GAAP) and, in the case of annual financial statements, that contain an audit report that indicates that the auditors have complied with generally accepted auditing standards (GAAS) in completing their audit. Issuance of financial statements then would generally be the earlier of when the annual or quarterly financial statements are widely distributed to all shareholders and other financial statement users <sup class="ph sup">FN4</sup> or filed with the Commission. Furthermore, the issuance of an earnings release does not constitute issuance of financial statements because the earnings release would not be in a form and format that complies with GAAP and GAAS.
    
    -   FN4 Posting financial statements to a registrant's web site would be considered wide distribution to all shareholders and other financial statement users if the registrant uses its web site to disclose information to the public in a manner consistent with the requirements of Regulation FD. See the Commission's interpretive guidance in Exchange Act Release No. 58288 (Aug. 7, 2008).