On June 23, 2020, the SEC published updated Guidance on disclosures of operations, liquidity, and capital resources in light of COVID-19. The Guidance urges companies “to provide disclosures that allow investors to evaluate the current and expected impact of COVID-19 through the eyes of management and to proactively revise and update disclosures as facts and circumstances change.” It also notes that the disclosures in question may be material to voting decisions as well as investment considerations. Some specific areas of guidance include the transition to “telework”; supply chain and distribution challenges; the health and safety of employees and others; the availability of financing, including government assistance; and providing supplier and customer credit. In addition, the Guidance includes a series of questions that can help companies address specific investor concerns.
Also on June 23, the SEC’s Office of Chief Accountant issued a “Statement on the Continued Importance of High-Quality Financial Reporting for Investors in Light of COVID-19.” Among other things, the Statement focuses on significant estimates and judgments, the importance of disclosure controls and procedures as well as internal control over financial reporting; addressing complex or emerging financial reporting issues; and the critical role of audit committees. Issuers should take the Statement into consideration as they prepare their reports for the second quarter of 2020.
If you have any questions on the Guidance, please contact Gunster securities law and corporate governance practice leader Bob Lamm.
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This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this publication.
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Gunster, Florida’s law firm for business, provides full-service legal counsel to leading organizations and individuals from its 13 offices statewide. Established in 1925, the firm has expanded, diversified and evolved, but always with a singular focus: Florida and its clients’ stake in it. A magnet for business-savvy attorneys who embrace collaboration for the greatest advantage of clients, Gunster’s growth has not been at the expense of personalized service but because of it. The firm serves clients from its offices in Boca Raton, Fort Lauderdale, Jacksonville, Miami, Naples, Orlando, Palm Beach, Stuart, Tallahassee, Tampa Bayshore, Tampa Downtown, Vero Beach, and its headquarters in West Palm Beach. With more than 280 attorneys and consultants, and over 290 committed professional staff, Gunster is ranked among the National Law Journal’s list of the 500 largest law firms and has been recognized as one of the Top 100 Diverse Law Firms by Law360. More information about its practice areas, offices and insider’s view newsletters is available at www.gunster.com.
