|
|
“Even though they are nominally written in English, the disclosures in some documents that are provided to investors are often so full of legal jargon and boilerplate disclosure that they can actually obscure important information.
”
Christopher Cox, former SEC Chairman, May 3, 2006
|
|
|
|
|
DISCLOSURE DRAFTING TIPS
Welcome to my disclosure drafting tips! I hope to use this page to highlight some common errors that I find as I read annual reports, proxy statements, Forms ADV (or is that Form ADVs?), and other disclosure documents. The names have been changed to protect the innocent, but I promise: every “before” that you see here is real.
Please check back often. I will add a new tip every week or two. If your company has any particularly gnarly disclosure paragraphs that you want me to tackle, please send them along!
Tip: Consider whether you really need to include that date
Before
Based on reviews of impairment indicators during the second, third and fourth quarters of 2009, further reviews of goodwill recorded in our ABC unit were necessary. These supplemental reviews indicated that the estimated fair value of the ABC unit continued to exceed its carrying amount at June 30, 2009, September 30, 2009, and December 31, 2009. No further impairment testing was required. Based on our quarterly review of impairment indicators during the first nine months of 2010, we determined that further reviews of goodwill were necessary. These reviews indicated the estimated fair value of the ABC unit continued to exceed its carrying amount at September 30, 2010, June 30, 2010, and March 31, 2010. No further impairment testing was required.
***
The Board of Directors also authorized an equity shelf program pursuant to which we conduct “at-the-market” offerings of our Common Shares. On May 11, 2009, we commenced a public “at-the-market” offering of up to $750 million in aggregate gross proceeds of Common Shares. We subsequently increased the aggregate gross sales price of the Common Shares to be issued to $1 billion on June 2, 2009, and, on the same date, announced that we had successfully issued all $1 billion and successfully sold the full amount.
***
The “Patient Protection and Affordable Care Act” and “Education Reconciliation Act of 2010,” which were signed into law on March 23, 2010, and March 30, 2010, respectively, changed the tax treatment of federal subsidies paid to sponsors of retiree health benefit plans that provide a benefit that is at least “actuarially equivalent” to the benefits under Medicare Part D.
Before, with commentary
[Sometimes the exact date that something happened is a critical piece of information. More often, you can eliminate a date (or reduce it to month and year), making your document easier to read without impairing your disclosure.]
After
Based on our quarterly review of impairment indicators during the second, third and fourth quarters of 2009, and the first three quarters of 2010, it was necessary to perform further reviews of goodwill. These reviews indicated the estimated fair value of the ABC unit continued to exceed its carrying amount at the end of each of these six quarters. No further impairment testing was required.
***
The Board of Directors also authorized an equity shelf program pursuant to which we conduct “at-the-market” offerings of our common shares. In May 2009, we commenced a public “at-the-market” offering of up to $750 million in aggregate gross proceeds of common shares, but subsequently increased the aggregate gross sales price of the common shares to be issued to $1 billion. In June 2009, we announced that we had successfully issued all $1 billion and sold the full amount.
***
The “Patient Protection and Affordable Care Act” and “Education Reconciliation Act of 2010,” which were both signed into law in March 2010, changed the tax treatment of federal subsidies paid to sponsors of retiree health benefit plans that provide a benefit that is at least “actuarially equivalent” to the benefits under Medicare Part D.
Tip Archive
|
|
|
|
|