What the audit committee needs to know

On May 5, the SEC issued a rule proposal that would provide an optional semiannual reporting framework as an alternative to the existing quarterly reporting framework. The optional semiannual reporting framework would be available to any registrant currently required to file a quarterly report on Form 10-Q.

Form 10-S would replace Form 10-Q for semiannual filers

A company that elects the semiannual reporting framework (a semiannual filer) would forgo filing quarterly reports on Form 10-Q (for the first, second, and third quarters of its fiscal year) and would instead file one interim report covering the first half of the fiscal year on new Form 10-S. Form 10-S would require the same information that is currently required by Form 10-Q, except that the financial information (and related disclosures) would cover the fiscal six-month period instead of a quarter. Unlike Form 10-Q, which requires presentation of both quarter-to-date and year-to-date periods, Form 10-S would only require presentation of the year-to-date (i.e. semiannual) period, though voluntary presentation of quarterly information would be permitted. The financial statements in Form 10-S would be required to be (1) prepared under US GAAP, (2) reviewed by the auditor, and (3) data tagged using Inline XBRL.

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