Market Trends 2022/23: Financial Disclosures for Merger & Acquisition Transactions

This practice note discusses the main amendments to the financial disclosure requirements for acquisitions and dispositions of businesses by U.S. reporting companies, which took effect in January 2021. The amendments aim to improve the quality and relevance of the information provided to investors, reduce the complexity and costs of preparing the disclosures, and promote capital formation. The practice note highlights some of the key changes to the significance tests, the pro forma financial information, the acquired business financial statements, the real estate operations financial statements, the foreign business and foreign private issuer financial statements, and the smaller reporting company and Regulation A financial statements. The practice note also provides some examples of SEC disclosures that illustrate how the reporting companies have implemented the amendments and offers some recommendations on how to prepare and enhance these disclosures.