SEC Issues Guidance on Interim Reporting Requirements to Disclose Changes in Shareholders’ Equity

On September 25, 2018, the SEC staff issued guidance on compliance with the new requirement to present changes in shareholders’ equity in interim financial statements within Form 10-Q filings. The requirement was adopted in August as part of the amendments to eliminate redundant and outdated disclosure requirements of Regulations S-X and S-K.^[1] The amendments take effect on November 5, 2018.   
 
The disclosure of changes in shareholders’ equity within a registrant’s Form 10-Q filing is required on a quarter-to-date and year-to-date basis for both the current year and prior year comparative periods. We understand that a registrant may disclose the changes in one of two ways:

1. Reconcile the changes in two separate schedules detailing the quarter-to-date changes and the year-to-date changes; or

2. Reconcile the changes in one schedule, detailing the changes in each quarter within the fiscal year.

In light of the effective date of the amendments, some questioned when a registrant would be first required to disclose the changes in shareholders’ equity in its Form 10-Q filing. The staff issued Compliance and Disclosure Interpretation 105.09 noting the staff would not object if a registrant first discloses the changes in shareholders’ equity in its Form 10-Q for the quarter that begins after November 5, 2018.
 
The following table summarizes the effective dates for various fiscal year ends:

Fiscal Year-End	Disclosure required in the Form 10-Q for the quarter ending:
December 31	March 31, 2019
March 31	June 30, 2019
June 30	March 31, 2019
September 30	March 31, 2019