COVID-19: Meeting SEC Deadlines and Disclosure Rules
Editor's note: This post was updated 26 March 2020.
The transition to remote work as a result of the new coronavirus may be upending your attempts to file timely reports to the SEC. Whether you rely on your team, your auditors or even a third party for your SEC reporting process, it takes a village to get reports out the door, even during the best of times. As you may have noticed, these aren't the best of times.
The good news is the SEC understands and has been announcing some leeway, giving public companies the ability to file up to 45 days beyond their normal deadlines. Meanwhile, accounting and finance teams are working furiously to update estimates, forecasts, and judgemental accounting determinations all while sheltering in place and working from home.
Here's what to remember if you need to delay filing a report normally due between 1 March and 1 July, with a checklist of what to consider as you review impacts of COVID-19 on your operations.
What to do if you can't make your SEC filing deadline
The SEC relief to help public companies meet their filing obligations during the pandemic is similar to the accommodations that the SEC gives filers via Form 12b-25, the notification of a late filing. In this case, you'll file an 8-K (or 6-K, if applicable) that would include:
- A reference that you're relying on the 25 March order
- The reasons you cannot file your report on time
- The estimated date by which you expect to file
- If material, a risk factor describing the impacts of COVID-19 on your business
If you plan to ask for filing relief, be sure to read the full (and latest) SEC order for other conditions, especially if your delay is caused by a third-party report, opinion, or certification. Also, keep an eye on the commission's website for updates, since the SEC says it will continue monitoring.
How COVID-19 might affect your disclosures
Start with your auditors' guidance and the latest guidance on the SEC's site (here's guidance posted 25 March)—but COVID-19 and the uncertainty surrounding the pandemic will influence your earnings guidance and the way you talk about the impacts of the current environment in your MD&A (management discussion and analysis). This uncertainty could be related to:
- Your customers
- Your supply chain
- Work stoppages
In addition, be sure to take a close look at the way current conditions might impact the potential impairment of goodwill, long-lived assets or intangible assets and the potential impact to your valuation and impairment of receivables, loans and investments.
Your peers are no doubt encountering many of the same challenges. Sentieo, a Workiva partner, is an AI-powered research platform you can use to help you quickly surface how other companies are addressing these same issues in disclosures. Keep Sentieo in your back pocket as an option if you suddenly need to backfill someone who normally might have done this research or if you find you'd rather have your people spending time updating forecasts versus searching through peers' filings.
Don't forget these last two points
Finally, be sure to keep up to speed on this rapidly unfolding situation, as new developments could have a significant impact on your disclosures, even after the balance sheet date.
- Pay attention to subsequent events and any other information that becomes available after the reporting date but before you issue your financial statements. Such events may affect your disclosure.
- Be as transparent as possible—including about what you don't know.
These are unprecedented times, and uncertainty abounds. While that uncertainty may impact your disclosures, it doesn't have to destroy confidence in your reporting.