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MD&A In Depth Workshop

  • Review in detail the requirements and rules for each section of MD&A
  • Grapple with the most challenging issues within each section
  • Review examples of good and bad MD&A disclosures
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Agenda

Day 1
8:00 - 8:30 a.m. Registration/Breakfast
8:30 - 9:00 a.m. Objective and Evolution of the MD&A Requirements
  • Why the MD&A has been so controversial from day one
  • The SEC's ever-increasing concern in today's environment
  • Evolution of the requirements – Item 303 of Regulation S-K – FR 36 – the Caterpillar, the Sony and other enforcement actions -- significant new proposals and guidance in 2003 including FR 72
  • The SEC's increased emphasis through the "financial review" of 1934 Act filings
9:00 - 10:00 a.m. The Overall Concept of the MD&A in General
  • The three pronged approach – liquidity, capital resources and results of operations
  • Should you add an "executive level" summary?
  • The historical analysis of each of the three prongs
  • The prospective discussion of each of the three prongs
  • The concept of the known trend, demand, event, commitment and uncertainty
  • The probability/materiality test regarding known uncertainties –"more likely than not" vs. "reasonably likely"
  • Effective use of cautionary language under the U.S. Private Securities Litigation Reform Act – examples: Good and bad
10:00 - Noon Specific Requirements of the Discussion of Results of Operations
  • The year-by-year historical analysis
  • Deeper ANALYSIS!
  • Getting rid of "elevator music"
  • The discussion of gross revenues – the price/volume/product mix analysis
  • Unusual and non-recurring items – their cause and their impact
  • The need for discussion by segment, product line or other business components
  • Impact of an acquisition, a disposition and the effect of exchange rate changes on the discussion
  • Changes in accounting policy – the expected impact (SAB 74) and the resultant impac
  • Proper use of alternative measures of performance (e.g. EBITDA) – New S-K Item 10 Guidance
  • Critical accounting policies (as prescribed by FR-60) and the related May 2002 proposal for discussion and analysis of significant accounting estimates in their application
Noon - 1:00 p.m. Luncheon
1:00 - 2:00 p.m. Specific Requirements of the Discussion of Liquidity and Capital Resources
  • Analysis of the cash flow statement for the past three years
  • Changes in liquidity during the current year
  • Short-term vs. long-term future requirements
  • The availability of funds to meet future requirements
  • The projected deficiency in future requirements – the proposed or intended resolution
  • Year-by-year future liquidity requirements for contractual obligations and the effects of off-balance sheet financing arrangements and related party transactions (as prescribed by FR-61) and the related Sarbanes-Oxley amendment to Item 303.
2:20 - 4:15 p.m. Specific Current Areas of Emphasis by the SEC
  • The contractual obligations table
  • Off-balance sheet financing disclosures
  • Restructuring and impairment charges (as prescribed by SAB 100)
  • Purchase price allocation of a business combination – especially any in-process research and development costs contained therein
  • Significant foreign operations and/or foreign currency transactions – their impact and resultant risks
  • The net deferred tax asset under SFAS 109
  • The use of derivative financial instruments – relationship to the market risk disclosures in Item 7A
  • Significant research and development activities
  • Effects of related party transactions and off-balance sheet financing arrangements
  • Discontinued operations
  • Environmental and other contingencies
  • Current SAB 74 issues – describing the expected effect of new GAAP standards
  • Industry trends and uncertainties
  • Mini-cases on selected areas of emphasis
4:15 - 4:30 p.m. The MD&A in Interim Filings
  • Differences between the interim and the annual MD&A
  • The "updating" concept of the discussion
  • The period-by-period historical analysis
  • The prospective discussion – the importance of seasonality
  • Case study on the interim MD&A
xx CPE Credits: 8 xxx Program Level: Intermediate x Prerequisites: None

Learning Objective: By using lecture and interactive exercises, this workshop will give participants a basic understanding of how to prepare the US SEC's Management's Discussion and Analysis section of the Form 10-K Annual Report, 10-Q Quarterly Reporting, and registration statements, including the scope and types of disclosures required by the SEC.

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       Year after year, an excellent program. I expect to attend this program every year until I retire!

Pamela B. Bruno Vice President, Controller & CAO BNP Residential Properties, Inc. Charlotte, NC

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