The amendments represent a shift by the SEC towards a more principles-based approach to disclosure and away from prescriptive requirements that specify the content and manner of disclosure. The amended rules afford registrants greater flexibility to determine which information is material to an understanding of their business and how to present the information. In many cases, registrants will have to consider how to recast the current description of their business, based largely on line-item disclosure requirements, into a presentation more closely tailored to their particular business and financial circumstances.
The SEC’s adopting release describing the amendments (Nos. 33-10825 and 34-89670) may be accessed here.
Authored by Alan Dye, Richard Parrino, Alex Bahn, Kevin Greenslade, William Intner, and Abigail Smith