Public company reporting
The Public Company Rulebook
SEC filings, interim reporting, and segments run on bright-line numbers: 10-K audited, 10-Q reviewed, 8-K in four business days, AETR each quarter, and the 10 and 75 percent segment tests.
How the exam words it
- -The stem asks which filing 'must be submitted within 4 business days of a material event', or contrasts 10-K and 10-Q requirements.
- -It gives quarterly income and an estimated annual effective tax rate and asks for 'the income tax expense for Q2'.
- -It gives segment revenues, profits, or assets and asks 'which segments must be separately reported under the 10% quantitative threshold' or whether one segment 'is reportable'.
- -Reportable segments' revenue falls short and it asks 'what step is still required?' for the 75 percent test.
The playbook
- 1Match the filing to its deadline and assurance: 10-K annual and audited, 10-Q quarterly and reviewed, 8-K within four business days.
- 2Interim periods are integral: quarterly tax = year-to-date income times the AETR, minus expense recognized in earlier quarters.
- 3A segment is reportable if it passes ANY one of the 10 percent tests: revenue, profit or loss (against the larger of combined profits or combined losses), or assets.
- 4Keep adding segments until reportable external revenue reaches 75 percent of consolidated revenue.
The trap
Requiring a segment to pass all three 10 percent tests. Passing any one makes it reportable, and the 75 percent rule can force in even more segments.
How the exam varies it
The same pattern, re-skinned along these axes:
SEC filing mechanics versus interim reporting versus segmentsWhich 10 percent test does the workSingle-quarter computation versus cumulative year-to-date
Drill this pattern
8 questions of The Public Company Rulebook from across the AUD topics. Clear it by getting 5 right with a streak of 3.