Securities Advisory: Critical Accounting Policies
6/10/2002
This advisory describes new disclosure regulations proposed by the SEC that relate to the application of issuers' critical accounting policies. The proposed regulations, which would be included in issuers' Management's Discussion & Analysis (MD&A), would require a company to disclose critical accounting estimates made in applying its accounting policies and to disclose information concerning the initial adoption of an accounting policy that has a material impact on the company's financial presentation. This advisory discusses the objectives of these new proposals and introduces more specifically the types of information whose disclosure would be required should the proposals be adopted. It also discusses further proposals that the SEC is considering to improve MD&A disclosure and establishes how the proposed regulations would affect foreign private issuers and small business issuers.
