Definition
Financial Reporting Release (FRR) refers to an official communication issued by the U.S. Securities and Exchange Commission (SEC). These releases provide guidance and clarification on various accounting and auditing matters, affecting public companies and their financial disclosures. The aim is to ensure transparency, reliability, and accuracy in financial reporting, thereby fostering investor confidence and maintaining market integrity.
Examples
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FRR 79: Addressed the modification of the SEC’s rules for auditor independence. These updates guide auditors to ensure their impartiality and objectivity in examining financial statements.
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FRR 59: Focused on the requirement for Management’s Discussion and Analysis (MD&A) to include off-balance-sheet arrangements. This release aimed to enhance investors’ understanding of a company’s financial position by requiring detailed disclosures of potential liabilities that are not reflected on the balance sheet.
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FRR 65: Provided guidance on fair value measurements and disclosures, ensuring consistency and transparency in how companies measure and report the fair value of their assets and liabilities.
Frequently Asked Questions
Q1: Who issues Financial Reporting Releases? A1: Financial Reporting Releases (FRRs) are issued by the U.S. Securities and Exchange Commission (SEC).
Q2: What is the primary purpose of an FRR? A2: The primary purpose of an FRR is to provide guidance and clarification on accounting and auditing practices, ensuring transparent, reliable, and accurate financial reporting.
Q3: Do FRRs affect all companies? A3: FRRs primarily affect public companies that are required to file financial statements with the SEC. However, they can also influence broader accounting and auditing standards.
Q4: How often are FRRs issued? A4: FRRs are issued on an as-needed basis, depending on emerging issues or changes in accounting and auditing practices.
Q5: Where can one find FRRs? A5: Financial Reporting Releases can be found on the SEC’s official website, typically in their regulatory or releases sections.
Related Terms
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Generally Accepted Accounting Principles (GAAP): A set of accounting principles, standards, and procedures that companies use to compile their financial statements, ensuring consistency and comparability.
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Securities and Exchange Commission (SEC): The U.S. government agency responsible for enforcing federal securities laws and regulating the securities industry to protect investors and maintain fair and efficient markets.
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Management’s Discussion and Analysis (MD&A): A section within annual reports where company management provides an overview of the financial activities, business performance, and significant trends influencing the company’s operations.
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Fair Value Measurement: The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Online References
- SEC Financial Reporting Releases
- SEC Official Website
- Investopedia - Securities and Exchange Commission (SEC)
- Financial Accounting Standards Board (FASB)
Suggested Books for Further Studies
- Wiley GAAP 2023: Interpretation and Application of Generally Accepted Accounting Principles by Joanne M. Flood.
- Financial Accounting and Reporting by Barry Elliott and Jamie Elliott.
- The SEC and Capital Market Regulation: The Politics of Expertise by Paul G. Mahoney.
- Corporate Financial Reporting and Analysis by David F. Hawkins, Michael S. Kupperman, and Jacob Cohen.
Accounting Basics: “Financial Reporting Release” Fundamentals Quiz
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