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Company And Group Financial Reporting 7th Edition Answers WORK
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Question: A registration statement on Form S-4 is filed to register stock to be issued in the acquisition of a non-reporting company by a reporting company. Only the non-reporting company will solicit proxies. Can a proxy card be sent with the red herring prospectus?
Question: Is a company that was previously required to file reports with the Commission under Section 15(d) of the Exchange Act, but that has since suspended its Exchange Act reporting obligation, an eligible issuer under Rule 251(b)(2) of Regulation A?
Answer: Yes. A company that has suspended its Exchange Act reporting obligation by satisfying the statutory provisions for suspension in Section 15(d) of the Exchange Act or the requirements of Exchange Act Rule 12h-3 is not considered to be subject to Section 13 or 15(d) of the Exchange Act for purposes of Rule 251(b)(2) of Regulation A. [June 23, 2015]
Answer: Yes. Consistent with the treatment of "emerging growth companies" in Section 71003 of the Fixing America's Surface Transportation (FAST) Act, a company filing or non-publicly submitting an offering statement pursuant to Regulation A may omit financial information for historical periods otherwise required by Part F/S of the Form 1 A, including financial information of other entities required to be included in Part F/S, if it reasonably believes the omitted information will not be required to be included in a filing at the time of qualification, so long as the issuer amends the offering statement prior to qualification to include all financial information required to be included in Part F/S at the time of the qualification.
Question: Will the staff object if an issuer with an ongoing Regulation A reporting obligation does not include an auditor's consent to the use of an audit report for the financial statements included in a Form 1-K (Annual Report) as an exhibit to the Form 1-K?
Question: A not-for-profit, tax exempt hospital with total assets of $3,000,000 is purchasing securities in a Regulation D offering. The hospital controls a subsidiary with total assets of $3,000,000. Under generally accepted accounting principles, the hospital may combine its financial statements with those of its subsidiary. Is the hospital accredited? Would the result be the same if one hospital were a holding company with financial statements that are combined with those of an affiliated hospital, where the affiliated hospital is not technically a subsidiary?
Question: Under Rule 502(b)(2)(iii), an issuer that must provide a disclosure document, whether it is a reporting or non-reporting issuer, is required to identify and make available those exhibits that would accompany the registration form or report upon which the disclosure document is modeled. Does a Regulation D issuer have to make available an opinion of counsel as to the legality of the securities being issued and, if there are representations made as to material tax consequences, a supporting opinion of counsel regarding such tax consequences?
Question: A reporting company proposes to offer securities under Regulation D. Because of the size and price of the offering, the company feels compelled by Section 10(b) of the Exchange Act to issue a press release discussing the offering. Would such a press release by the issuer constitute general solicitation or general advertising, activities which are not permitted by Rule 502(c) in connection with most Regulation D offerings?
Question: A foreign issuer intends to conduct a Rule 701 offering exceeding the $5 million threshold in Rule 701(e). Is the issuer required under Rule 701(e)(4) to deliver to investors financial statements that are no more than 180 days old, or can the issuer deliver its annual and interim financial statements only at the frequency required of foreign issuers that are Exchange Act reporting companies?
Question: A company is no longer required to file reports under Exchange Act Sections 13(a) or 15(d). With respect to employee stock options that are outstanding upon the suspension or termination of the company's Exchange Act reporting obligations and for which underlying shares previously registered on Form S-8 have been removed from registration by post-effective amendment (the "Outstanding Stock Options"), is the Rule 701 exemption available to the company for the exercise of the Outstanding Stock Options? Is the Rule 701 exemption available for the exercise of stock options that the company grants in the future?
Answer: Rule 701 is available to a company upon suspension or termination of its Exchange Act reporting obligations. With respect to the Outstanding Stock Options, if the aggregate exercise price of those options exceeds $5 million, the company must deliver the disclosure required by Rule 701(e) in a reasonable period of time before the options are exercised in order to rely on the Rule 701 exemption for the sale of the underlying shares upon exercise of the options. With respect to future grants, the company is considered to start with a clean slate under Rule 701 upon suspending or terminating its Exchange Act reporting obligations. Shares underlying the Outstanding Stock Options are not included for purposes of determining compliance with the 12-month sales limitation requirements in Rule 701(d) and the disclosure requirements in Rule 701(e). [June 4, 2010]
522.02 A reporting company filed a registration statement on Form S-4 for a Rule 145 merger transaction. Shareholders had voted to approve the transaction and no further shareholder vote regarding valuation contingencies was required. The approval of a regulatory authority was needed before the transaction could be closed. On these facts the sale of the shares occurred when shareholders voted to approve the merger; accordingly, the registered offering had been completed for purposes of Rule 139. [Jan. 26, 2009]
539.04 Item 17(b)(7) of Form S-4 states generally that the financial statements of acquired companies that were not previously Exchange Act reporting companies need be audited only to the extent practicable, unless the Form S-4 prospectus is to be used for resales by any person deemed an underwriter within the meaning of Rule 145(c), in which case such financial statements must be audited. The Division staff was asked whether a resale pursuant to Rule 145(d), in lieu of the Form S-4 prospectus, would require the financial statements to be audited. The Division staff noted that Rule 145(d) is not included in the Instruction to Item 9.01 of Form 8-K regarding sales pursuant to Rule 144 during the 71-day extension period for filing financial statements. As the audited financial statements for the acquired company would be required pursuant to Item 9.01 of Form 8-K, a resale pursuant to Rule 145(d) would not be permitted until they are filed. [April 2, 2008]
573.02 Company A, which is not an Exchange Act reporting company, proposes to use Form S-3 to issue debt securities that would be guaranteed by its Exchange Act reporting parent. Company A is a wholly-owned subsidiary of parent and the guarantee is full and unconditional. The exemption from prospectus delivery requirements provided by Rule 174(b) would be available for this offering because the parent would be subject to the Exchange Act reporting requirements immediately prior to the time of filing the registration statement, Company A would be wholly-owned by parent, and parent would fully and unconditionally guarantee the debt securities. [Jan. 26, 2009]
609.01 A calendar year company proposed to file a registration statement on Form S-3 on February 1, 2006. The registrant would include financial statements for the year ended December 31, 2005, and incorporate its Form 10-K for the year ended December 31, 2004. The registrant was concerned because the financial statements in the 2004 Form 10-K would become out of date. Rule 412(a), however, has the effect in these circumstances of automatically superseding the December 31, 2004 financial statements for purposes of the Form S-3 filing. In the event the registrant wished to remove all doubt about outdated financial statements in the Form 10-K being superseded by later financials included in the Form S-3, Rule 412(b) permits it to include a specific statement in the Form S-3 on the subject. [Jan. 26, 2009]
One of the most significant expenses a business will incur is that of salaries (wages and benefits). Create an accurate monthly estimate of your labour costs through each of your planning stages. You will also need to project labour costs in your cash flow summaries, to ensure your business can manage and meet payroll obligations. Below is an example of a labour cost spreadsheet that also estimates the company costs of employee benefits. If you intend to pay bonuses, you would simply add another row or rows as required. It will be critical to outline your assumptions as to the timing of these bonuses as your financial advisor will require this information to manage your cash flow. Bonuses should only be paid out if the company is profitable.
Tip: There will be no forecast in the income statement for the payment of taxes (for a sole proprietorship) The main difference between a company, partnership and the sole proprietorship is the area of taxes payable and remuneration. Your financial advisor will assist you in how you will reflect this in your forecast(s). For example there may be no salary expense in a sole proprietorship or partnership (they may be shown as withdrawals after profit calculations whereas active shareholders' remuneration for wages and bonuses may be shown as a management expense in the general administration section of the income statement. Depreciation expenses could also be handled differently in a sole proprietorship if these assets are utilized in the generation of revenues not associated to this venture. You are encouraged to engage professional assistance in the creation of these documents. Your advisor will help you complete these forms in accordance with general accepted accounting principles (GAPP). 2b1af7f3a8