Concept release comments, Disclosure effectiveness initiative. SEC reporting, Securities Regulation

1. CONCEPTRELEASE: BUSINESSAND FINANCIALDISCLOSUREREQUIREDBY REGULATION
Request
comment
number
Personal comments
67 Item301 isimportantto investors. Ido not know whyfive yearinformationonthe table,4or 3 yearswill not
hurt
68 We can afford to eliminateitem301because of 3rd
party offerof thistable. Itseliminationwill notincrease
itscosts to investorsbecause itwillbe available online maybe forfree. Noadditional effortwill be provided
to access thisinformationforfree
69 If we retainit, SEC shouldmodifyitwithafew yearsandreducedinstruction2to abide toinstruction1 ’the
purposeof theselected financial data should beto supply in a convenientand readableformatselected
financialdatawhich… ‘
70 The problemof 5 yeartrendis that the item303 doesnot longerprovide inpractice 5year trenddisclosure,
one of themshould. If 5 year periodisappropriate,there isnowaywe wouldeliminate thisdisclosure.
Reductionof instruction2can improve the quality,desirability andattractivenessof thisitem(301)
71 No,we shouldnotrevise item301 to provide asimilaraccommodationforEGC and small businessbecause
of lackof reliable informationandrapidgrowth
72 No, SEC shouldnotrequire item301 underthese circumstances
73 No, SEC shouldfocusonmakingcurrent disclosure desirable and attractive toinvestorswhentheyare
makinginformedvotingandinvestmentdecision
74 Sophisticatedinvestorsare more likelytovalue item301
75 Withthe rightautomaticsystem, providingthisdatawill notrequire toomuchefforts
76 Instruction2 doesnotprovide the neededdisclosure. We shouldmodifythisitemtoincludeaflexible
approach focusingonvoluntarydisclosure while providingthe reasonforchoosingeachitemfordisclosure.
77 We don’tneedapreferabilitylettersignedbyanyauditornotbecause itwill increase disclosure costsbut
alsoit will be avoluntarydisclosure withsomelimitations
78 Listingof specificitemsof disclosure oninstruction2impactsthe way the registrantwill provideits
disclosure. Itshowsthattheyare all requiredasa checklist. Itmustaddressitsdisclosure toall of these
itemswitha prescriptiveapproach.
79 We shouldretain302 (a) while removing302 (a)(1)
80 It isimportantto the investingpublicbeside item(302)(a(1),the restisnotthat duplicative itiswhyitshould
not be classifiedinthe removallist.
81 Investorsstill needinformationaboutpatternof corporate activitieswithtrendoverregistrantsegments
82 I objectto the auditorinvolvementanditspreferabilitylettersorreview will increase the costsof disclosure
83 Investorsuse some of the items302 (a) disclosure
84 Sophisticatedinvestorsvalue more thiskindof disclosure (item302(a))
85 Item302 disclosure increasescostsof disclosure butithelpsinvestorsassessitssegments
86 The financial costswoulddecrease withthe eliminationof item302 butinvestors maynotbe informed
effectivelytoassesssegments
87 Wouldinvestorsassesseffectivelysegmentswithoutitem302information,Idonot know the answerto that
question
88 All item303 requirementsare importanttothe investingpublic. Itiswhy MD&A isthe nucleusof the full
disclosure (10-K,10-Q). You cannotbe more informedabout10-Kor 10-Q if youdidnot read and
understandthe discussionandanalysisof the MD&A. It is whyMD&A is the numberone frequently
commentspartof the disclosure (44%). We can improve the quality anddesirability of MD&A by limiting
aggressive language style andmakingsure thatregistrantsfollow aprescriptivecheckliststyledisclosure.

2. 89 The current disclosure focusonregistrantfinancial conditionandresultsof operation. Materiality standard
isworking. It iswhyI believe the adoptionof othermethodsincludingthresholds(beenthere)willreduce
the flexibilitythe registranthasnow inwritingitsanalysisfromthe eye of itsmanagement
90 Yes, SEC shouldconsolidate all the guidance relatedtoMD&A as a workshopforwriters,managementand
regulators. Thisworkshopwill be afacilitator,youmustrememberthatMD&A ispresumed tobe writtenby
managementof the registrant. Itdoesnotmatter whoisthe ghostwriter
91 I believeitwill be bettertorevise rulestorequire anexecutivelevel overview. Itwill be goodforthe
registranttofollowachecklistwithacertainpresetsizesforvoluntarydisclosure
92 Like I didsay, the checklistcanhelptoreduce duplicativedisclosure
93 If we wantinvestorstogeta meaningful analysisinMD&A a combinationof eliminationof aggressive
language style,prescriptive checklistorienteddisclosure andprescriptivesize forvoluntarydisclosure can
help
94 Both sophisticatedinvestorsandreasonable investorsare takingtimestoreadMD&A. Whenitis to
quantitative,sophisticatedinvestorsare more likelytovalue thatpart
95 I do notknowif taggedformatwill be better
96 A MD&A is a legal documentwrittenbythe management of the registrant,once auditorgetsinvolvedinthis
part of the disclosure itwill notonlyincreasethe costof the disclosuresbutalsoshiftorshare liability
97 Item303 isexpensive anditcomeswithnon-financial andfinancialcosts. Ibelievethe reputationof the
whole discussionisinline if the managementanalysiscanconflictwiththe otherpartsof the discussion
creatingchallengestothe full disclosure.
98 Item303 helpsmanagementtell itsstoryof itsfinancial healthandoperation. Thisisthe testfor the
management,testsof fairnessandtransparency
99 The two steptestfor disclosure of aknowntrend,demand,commitment,eventoruncertaintywill require a
material testtoresultinthe most meaningfulforwardlookingdisclosure. The eventis‘reasonable likely’to
occur whenthere isthe chance of the future eventoccurringismore than remote butlessthanlikely
100 Yes,we shouldrevise the twosteptest toconsiderrequiringadisclosure whenatrend,eventoruncertainty
ismore likelythannotprobable orreasonablypossible tooccurrather than‘reasonablylikely’tooccur
101 SEC shouldrevise item303to incorporate the probability/magnitude standardfrom‘Basicv.Levinson’,itwill
turnoutlike disclosurewhenatrend,eventoruncertaintyismore likelythannot,probable orreasonably
possible tooccuror withtwo part test
102 It will make sense torevise item303 to specificallyrequire registranttothe extentpracticable,toquantify
the material effectsof knowntrendsanduncertaintiesaswell asthe factorsthatcontributedtothose known
trendsand uncertainties. Bydoingso,registrantwill share toolsitdiduse initsanalysis,itisprobable that
some readerswill notshare the registrant’sconclusionbuttransparencywillprevail becauseitprovidesan
understandingof the management’sanalysis
103 No,I believethatwe shouldrevise item303 to include aprescriptive checklistregistrantwill use intheir
disclosure
104 Yes, SEC should require disclosure of anycommentary,analysis,performance indicatorsorbusinessdrivers
relatedtoa registrant’skeyindicators. Ibelieve prescriptivechecklistcoupledwithprescriptive sizefor
voluntarydisclosurewillbe more appropriate.
105 Reasonable investorswill value more industryspecifickeyperformance indicators
106 Managementiswell positioned whenitcomestothe identificationof standardizedperformance metric
across an industry
107 SEC shouldretainaperiodbyperiodcomparisonprovidedinthe MD&A inorderto show changesfrom
previous periods
108 Additional disclosuresaboutregistrant’sresultsof operationsare warranted. Forinstance,social mediacan
provide factorstheyuse todetermine thatone userdoesnothave several accounts

3. 109 As farI am concerned,the 3 yearscomparisonismaterial informationtothe investingpublic. Itiswhythere
isno needforchange. Whenit comesto comparison,the highestthe numberof yearsthe betterreaders
and investorswillunderstand thistrend
110 SEC can allowregistrant’scrossreferencethe earliestof the 2 periods
111 Year to yearcomparisonmakesiteasyto understandthe trendandperformance of the registrant,itiswhy
registrantsrelyonthismethod. Theyare formatsor presentationsthatcouldresultinadiscussionand
analysisof the material informationnecessarytounderstandthe registrant’sprospectsforthe future. Itis
betterfora registranttoprovide the yeartoyear comparisonina standardizedtabularformat.
112 Item303(a)(3) doesnotprovide useful informationaboutregistrantsthathave notyetgeneratedrevenueor
begunoperations.
113 A separate disclosure willprovideaclearpicture of the liquidity,capital resourcesandprospectus of the
future
114 Registrantsmustbe requiredtoprovide aseparate disclosureof the liquidityanditscapital resources. Doing
so will encourage registranttodisclose if ittracksanyknowntrends,demands,events,commitmentor
uncertainties developingthatiscausingamaterial impacton future liquidity
115 It isnet cash providedbyoperatingactivities,netcashused ininvestingactivitiesandnetcashprovidedby
financingactivities. Definingthe term‘capital resource’willbe helpful forregistrants. Noall registrants
currentlyinterpretthe term‘capital resources’includingfundscommittedfrommaterial capital expenditures
and the sourcesof those funds.
116 I do notthinkso
117 Fiscal yearand interimperiods,Ibelieve these periodsare enough. Developmentsinthe mostrecentfiscal
yearis not sufficienttoconstitute atrendasthe termisusedin item303
118 A sensitiveanalysisinthe discussionanalysisof liquidityandcapital resourcescanbe requiredforthe fiscal
yearperiod
119 Registrantscanprovide additionalmeasuresof intraperiodliquiditywithaverage quarterlyliquidityorother
measurescharts
120 Registrantmustbe requiredtoprovide liquidityriskmanagementpoliciesandmore
121 Disclosure aboutregistrantsreliance onshorttermborrowingisnotclarifybyitem303, registrantsmust
describe all the sourcesof itsshort(long) termfunding(borrowing).
122 Yes,short termborrowingdisclosure 2010 proposal shouldbe revisited. Itwill resultinadditionaldisclosure,
quantitativelyandqualitativelyof the shorttermborrowing
123 SEC shouldconsiderdifferentdisclosure requirementsforfinancial institutionsversusnon-financial
institutions
124 Tabularrepresentation, chartingorgraphical representationof the shorttermborrowingdisclosure can
increase the quality,desirabilityandattractivenessof thisdisclosure
125 Item303 (a)(4) isimportanttoinvestors
126 SEC shouldretain itthe wayit is. Yes, SEC shouldalsorevise itsrulestorequire registrantstoanalyze the
risksand financial potential associatedwithoff balance sheetarrangements
127 The locationof thisdisclosure isnotimportant,itcan stay where itisbuttheyare a lot of challenges
associatedwithauditingthisinformation
128 It will be verycostlytocompletelyeliminatingitem303(a)(3
129 Registrantcan provide disclosure aboutmattersthatwill resultinorisreasonablylikelytoresultinthe
terminationormaterial reduction inthe availabilityof material off balance sheetarrangementstothe
registrantsandthe course of action the registranthas takenor proposestotake to addresssuch
circumstances
130 SEC shouldnotrequire additionaldisclosure of off balance sheetarrangementsthatoccurredduringa
reportingperiodwithexhibit

4. 131 The table of contractual obligationprovidesmeaningfulinformationtoitsinvestors. There isnotenough
room forimprovementtothistable.
132 SEC shouldrequire narrative disclosure toaccompanythe tabulardisclosure includingdiscussinghow
registrantplanstomeetcurrentand future obligation
133 It doesnotmatter the location,comparabilityamongregistrantsisstillthe goal of investorinmaking on
informed investmentdecisionandregistrantinevaluatingitsownperformance inthe peercompetition. A
narrative disclosure canaddquality,desirabilityandattractivenesstothe disclosure andimprove readers
abilitytounderstandthe disclosure
134 SEC shouldnotenhance item303(a)(5) byincludingothercategoriesof contractual obligationtothe 5
requiredcategories
135 Footnote disclosurecanprovide additional guidance suchasinterestpayment,repurchase agreementsortax
liabilities
136 I do notbelieve that revisitingitem303 (a)(5) torequire registranttoseparate amountsinthe table of
contractual obligationintothose thatare reflectedonthe balance sheetwill addquality,desirabilityand
attractivenesstothe disclosure
137 Yes,SEC shouldrevise item303 to require disclosure aboutcritical accountingestimatesbecause this
informationisimportanttoitsinvestors
138 SEC can use 2003 MD&A interpretive releasetodefine ‘critical accountingestimate’
139 Registrantsrepeatthe discussionof accountingpoliciespresentedinthe notestothe financial statement
because of lackof prescriptive checklistsguidance. Itwill helpthemtoavoidthisrepetition
140 2003 MD&A interpretive Release definitionof critical accountingestimatesisimportanttothe investing
public. If it isincorporatedintoRegS-Kitwill be better
141 For competitivereason,SECshouldadoptpresumptiverequirementsrelatingtocritical accounting
estimates. SECcan designand adopta prescriptive requirementsrelatingtocritical accountingestimates
afterrevisitingcurrentissuesand rulemaking projects2001. Theyare accountingestimatescommontoa
particularindustrythatare critical to all participantsinthatindustry (estimateonprice pershare of the
currentperiods )
142 SEC shouldrequire the disclosure of management’sjudgment(how didtheyassessmateriality) and
estimatesthatformthe basisforMD&A disclosure
143 SEC shouldrequire managementtodisclosethe nature of itsassessmentsof errorsthatitdeterminedtobe
material
144 SEC shouldrequire disclosure of othercritical accountingestimatessuchasthose that impactothermetrics
or measures(numberof newcustomers,numberof subscribers,…)