This letter should detail the scope of the auditing firm’s certification of the financial records, as well as any material deficiencies it uncovered. If the auditor thinks the company could face imminent demise, you might see the auditor referencing a question as to the company’s ability to “continue as a going concern” or something similar. If you ever come across something like those words, alarm bells should go off. There are many important parts of the Form 10-K that provide vital information to investors. Learn the layout and composition of the most commonly used financial reports.
What is the difference between a 10-K and an annual report?
For other accelerated filers the deadline remains at 75 days and for non-accelerated filers the deadline remains at 90 days. For further reading, see the Final Rules [1] section of the SEC’s website, referencing Rule 33–8644. Both a company’s annual report and its 10-K provide detailed insights into the company’s financial health, operations, and strategic direction.
What are the SEC Filing Deadlines for the Form 10-K Filing?
In the final section, the 10-K concludes with signed letters from the CEO and CFO certifying that all of the information in the filing is accurate to the best of their knowledge. Upgrading to a paid membership gives you access to our extensive collection of plug-and-play Templates designed to power your performance—as well as CFI’s full course catalog and accredited Certification Programs. 10-K filing deadlines are set by the SEC and usually depend on the size of the company. Companies file Form 10-K annually, between 60 and 90 days following the end of their fiscal year, depending on the organization’s size.
What is the Structure of the 10-K Filing Report?
This isn’t to say that the information contained in the 10-K is likely to be false. It’s just important to understand the point of view from which it was written when you’re considering investing your money. Our goal is to deliver the most understandable and comprehensive explanations of financial topics using simple writing complemented by helpful graphics and animation videos. We follow strict ethical journalism practices, which includes presenting unbiased information and citing reliable, attributed resources.
Unlike the Form 10-K, which is subject to specific regulatory requirements and accounting standards, the annual report is not bound by such constraints. Instead, it allows companies greater flexibility in crafting a narrative that aligns with their objectives and corporate identity. Through the annual report, companies seek to showcase their accomplishments, company values, and vision to stakeholders.
It has various sections including business, risk factors and legal proceedings. Investors should review this section, even if they are familiar with the company or business, paying special attention to any changes in the tax deductions guide, 20 popular breaks in 2021 language, particularly those related to risk factors and legal proceedings. The filing of Form 10-K is not limited to large corporations; it applies to companies of all sizes that meet the criteria for being publicly traded. This includes both domestic and foreign companies whose securities are listed on U.S. exchanges or are registered with the SEC. Additionally, certain smaller reporting companies may file a streamlined version of the Form 10-K, known as Form 10-KSB or Form 10-KT. Note that in order to file this alternative version, a company has to meet some eligibility requirements.
The form 8-K though is required by the SEC whenever companies announce major events of which shareholders must be made aware. 10-K is short for Form 10-K, which is a document the SEC requires all public companies to file each year. The form presents a financial picture of the company, detailing its revenues, assets, and liabilities for the previous year. Sometimes, rather confusingly, the 10-K is referred to as a company’s “annual report” by financial pros—because it summarizes the company’s year. (It’s even called that on Investor.gov, the SEC’s educational website. Strictly speaking, the glossy booklet described above is known as “the annual report to shareholders.”
Investors can compare the wording of the current 10-K to the wording of the previous 10-K, zeroing in on any variations in tone to see if slight changes have occurred that may affect the future operating environment. For information pertaining to the registration status of 11 Financial, please contact the state securities regulators for those states in which 11 Financial maintains a registration filing. Publicly traded companies are obligated to ensure these financial statements are audited by a registered certified public accountant (CPA). The purpose of the independent audit is to provide assurance that company management has presented financial statements that are free from material error. This section lists the principal risks facing a business, which could include risks unique to that organization or broader developments affecting the entire economy.
For example, new laws or regulations passed by the federal government that may impact the company’s ability to operate the business would be included. However, this document has its downsides, the most obvious of which is that it is backward-looking. Also, the 10-K can be overwhelming as the document often exceeds 100 pages in length. That said, in addition to other data investors gather on a company, the 10-K provides critical information investors need to assemble an investment puzzle. In Part II of the 10-K, you’ll want to make note of the management’s discussion and analysis. In here, management discusses its perspective on business results over the past 12 months.
Discover Wealth Management Solutions Near You
Information in a 10-K consists of both quantitative and qualitative disclosures. Let’s take a look at the most important sections for a financial analyst. Once general knowledge of the industry and company is obtained, more company-specific information can be ascertained in Part II, the MD&A section. Management may also discuss risks in more detail and provide explanation for how the organization is addressing them.
The name of the Form 10-K comes from the Code of Federal Regulations (CFR) designation of the form pursuant to sections 13 and 15(d) of the Securities Exchange Act of 1934 as amended. The signed letters were made a requirement after the accounting frauds following the dot-com bust, when WorldCom and Enron dominated the headlines. If revenues decline, and you stop sending checks to the landlord, the mall owner can kick you out of your storefront and force your company into bankruptcy due to the missed lease payment. These obligations are also disclosed somewhere in the Form 10-K, often under a section called “operating leases,” “fixed payments,” or “minimum cash payments due.”
Annual what is accounting purpose need and importance reports are more colorful, more pictorial, and glossy than a 10-K, which are restricted to simple words and text. It is difficult to find the same metric being used at conventional media companies. While accounting statements that adhere to Generally Acceptable Accounting Principles (GAAP) are common in the U.S., they are not necessary. In this section Financial Data showing consolidated records for the legal entity as well as subsidiary companies.
- In fact, the vast majority of companies include them in the Investor Relations section of their website.
- Form 10-Ks may seem intimidating at first, but they’re crucial documents when deciding where to invest money.
- Current accounting rules are written in a way that if management cannot accurately predict the potential damage of certain risk, it may not have to put aside any reserve at all.
- This only includes physical types of property, not intellectual or intangible property.
The annual report offers a shorter version of the 10-K report—the highlights, so to speak. That said, an investor or analyst will still find the details of a company’s finances in the annual report, including the balance sheet and income statement, as well as other useful financial data. Ultimately, a 10-K report is a full description of the company’s financial activity during a given fiscal year and a full rundown of risks, legalities, liabilities, corporate agreements, operations, and market performance. Also, 10-K reports provide a full analysis of the relevant industry, the marketplace as a whole, and individual business operations. Historically, Form 10-K had to be filed with the SEC within 90 days after the end of the company’s fiscal year.