In: Operations Management
The SEC 10-K assignment will consist of research and the completion of a paper on select areas of an annual SEC 10-K report filed by a public company with the U.S. Securities and Exchange Commission (SEC). The focus of this assignment is on the disclosure issues related to the segment information in the SEC 10-K.
Question and instructions ---- I selected a company Intel. Please write a 3 pages report on the recent SEC 10-K report. You will have to go on https://www.sec.gov and check the most recent repot of Intel. You can write it in 3 days.
Every year, we closely monitor the Securities and Exchange Commission (SEC) staff’s comments on public company filings to provide you with insights on its areas of focus. Understanding the SEC staff’s comments and trends can help you as you head into the year-end reporting season. However, each registrant’s facts and circumstances are different and require judgments about the appropriate accounting treatment and evaluations about materiality. Therefore, while this publication highlights areas where the SEC staff may comment, registrants should carefully consider their disclosures based on whether the information is material to investors.
The SEC continues to encourage registrants to streamline disclosures and make them more meaningful. SEC Chair Mary Jo White has said the SEC’s disclosure effectiveness project is a priority and has directed the SEC staff to undertake a comprehensive review of disclosure requirements and recommend changes. In light of this initiative, registrants should consider the following points when evaluating the trends in staff comments we highlight in this publication and whether to adjust their disclosures:
• The SEC staff often issues comments to obtain additional information when it believes that a company may not have complied with requirements or the information may be material to investors. That does not mean the staff has not reached a conclusion that the requested information is material. Registrants should consider the materiality of additional disclosures before including them solely to clear an SEC staff comment.
Registrants should regularly evaluate whether their disclosures continue to be material to investors as their facts and circumstances change. That is, they may eliminate immaterial disclosures even if they were included in prior filings in response to an SEC staff comment.
• Registrants should improve their disclosures by eliminating repetition and focusing on more meaningful discussion. For example, management’s discussion and analysis (MD&A) disclosure of critical accounting estimates often repeats disclosure from the significant accounting policies footnote without providing additional insight into the judgments and uncertainties underlying management’s estimates
U.S. public company, you can find a wealth of information in the company’s annual report on Form 10-K. Among other things, the 10-K offers a detailed picture of a company’s business, the risks it faces, and the operating and financial results for the fiscal year. Company management also discusses its perspective on the business results and what is driving them.
Most U.S. public companies are required to produce a 10-K each year and file it with the U.S. Securities and Exchange Commission (SEC). (Non-U.S. public companies usually file their annual reports with the SEC on different forms.) SEC rules require that 10-Ks follow a set order of topics.
SEC rules also require companies to send an annual report to their shareholders when they are holding annual meetings to elect members of their boards of directors. There is a lot of overlap in the requirements for the 10-K and the annual report to shareholders, but there are also important differences. The 10-K typically includes more detailed information than the annual report to shareholders. The annual report to shareholders, unlike the 10-K, sometimes appears as a colorful, glossy publication. A number of companies, however, simply take their 10-K and send it as their annual report to shareholders. In those cases, the 10-K filed with the SEC and the annual report to shareholders are the same document. For more information on the annual report to shareholders, please click here.
Following is a description of each section of Form 10-K, along with some suggestions on how to use the information. At the end of this document, we explain the role of public companies in ensuring the accuracy of their 10-Ks and the role of the SEC in reviewing the documents. We also tell you how to find company 10-Ks.
Item 1 - “Business” requires a description of the company’s business, including its main products and services, what subsidiaries it owns, and what markets it operates in. This section may also include information about recent events, competition the company faces, regulations that apply to it, labor issues, special operating costs, or seasonal factors. This is a good place to start to understand how the company operates.
Item 1A - “Risk Factors” includes information about the most significant risks that apply to the company or to its securities. Companies generally list the risk factors in order of their importance. In practice, this section focuses on the risks themselves, not how the company addresses those risks. Some risks may be true for the entire economy, some may apply only to the company’s industry sector or geographic region, and some may be unique to the company.
Item 1B - “Unresolved Staff Comments” requires the company to explain certain comments it has received from the SEC staff on previously filed reports that have not been resolved after an extended period of time. Check here to see whether the SEC has raised any questions about the company’s statements that have not been resolved.
Item 2 - “Properties” includes information about the company’s significant properties, such as principal plants, mines and other materially important physical properties.
Item 3 - “Legal Proceedings” requires the company to include information about significant pending lawsuits or other legal proceedings, other than ordinary litigation.
Item 4 - This item has no required information, but is reserved by the SEC for future rulemaking.
PART II
Item 5 - “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” requires information about the company’s equity securities, including market information, the number of holders of the shares, dividends, stock repurchases by the company, and similar information.
Item 6 - “Selected Financial Data” provides certain financial information about the company for the last five years. You can find much more detailed financial information on the past three years in a separate section – Item 8, “Financial Statements and Supplementary Data.”
Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” gives the company’s perspective on the business results of the past financial year. This section, known as the MD&A for short, allows company management to tell its story in its own words. The MD&A presents:
The company’s operations and financial results, including information about the company’s liquidity and capital resources and any known trends or uncertainties that could materially affect the company’s results. This section may also discuss management’s views of key business risks and what it is doing to address them.