Public Company Reporting Topics

Diluted earnings per share (EPS)

1. Incremental EPS = numerator effect ÷ added shares (options: $0 numerator).
2. Rank lowest to highest; add one at a time; stop when antidilutive.
3. Control number: income from continuing operations.

Participating securities → two-class method. Convertibles presumed settled in shares.

Securities and Exchange Commission (SEC) rules

• Regulation S-X (financial statements) · Regulation S-K (risk factors, management's discussion and analysis (MD&A), cybersecurity).
• MD&A: results, liquidity, known trends and uncertainties, critical accounting estimates.
• Measures other than Generally Accepted Accounting Principles (GAAP) measures: show the GAAP measure with equal prominence + a reconciliation.
• Cyber incidents: Form 8-K within 4 business days of materiality determination.

Sarbanes-Oxley Act (SOX)

302: chief executive officer (CEO) and chief financial officer (CFO) certify · 404(a): management's internal control report · 404(b): auditor attestation for accelerated and large accelerated filers.

Recent standards

Segment expenses (2023-07) · income tax disclosures (2023-09) · expense disaggregation (2024-03, from 2027) · crypto at fair value (2023-08).

Exam traps

• Auditor attestation under SOX 404(b) doesn't apply to non-accelerated filers.
• The four-business-day clock for disclosing a cyber incident starts when it's judged material, not when it's discovered.
• Two-class method: allocate undistributed earnings as if all earnings had been distributed.