
[Federal Register: April 23, 2009 (Volume 74, Number 77)]
[Rules and Regulations]               
[Page 18611-18619]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23ap09-10]                         


[[Page 18611]]

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Part II





Securities and Exchange Commission





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17 CFR Parts 210, 211, 229 et al.



Technical Amendments to Rules, Forms, Schedules, and Codification of 
Financial Reporting Policies; Final Rule


[[Page 18612]]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 210, 211, 229, 239, 240, and 249

[Release Nos. 33-9026; 34-59775; FR-79]

 
Technical Amendments to Rules, Forms, Schedules, and Codification 
of Financial Reporting Policies

AGENCY: Securities and Exchange Commission.

ACTION: Final rule; technical amendment.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is 
adopting technical amendments to various rules, forms and schedules 
under the Securities Act of 1933 (``Securities Act'') and the 
Securities Exchange Act of 1934 (``Exchange Act''). The Commission also 
is making certain technical changes to the Codification of Financial 
Reporting Policies (``CFRP''). These revisions are necessary to conform 
those rules, forms, schedules and the CFRP to two recently issued 
Statements of Financial Accounting Standards (``SFAS'') issued by the 
Financial Accounting Standards Board (``FASB''). SFAS 141 (revised 
2007), Business Combinations, and SFAS 160, Noncontrolling Interests in 
Consolidated Financial Statements--an amendment of ARB No. 51 
(collectively ``Statements'') were both issued in December 2007. The 
technical amendments include revision of certain rules in Regulation S-
X, certain items in Regulation S-K, certain sections in the CFRP and 
various forms and schedules prescribed under the Securities Act and 
Exchange Act.

DATES: Effective Date: April 23, 2009.

FOR FURTHER INFORMATION CONTACT: Steven C. Jacobs, Associate Chief 
Accountant, at (202) 551-3400, Division of Corporation Finance, or Eric 
C. West, Associate Chief Accountant, at (202) 551-5300, Office of the 
Chief Accountant, Securities and Exchange Commission, 100 F Street, 
NE., Washington, DC 20549-3628.

SUPPLEMENTARY INFORMATION: We are adopting amendments to Regulation S-
X,\1\ Regulation S-K,\2\ rules, forms and schedules under the 
Securities Act of 1933 \3\ and the Securities Exchange Act of 1934 \4\ 
and making technical changes to the CFRP. In Regulation S-X, we are 
adopting amendments to Rules 1-02, 3-01, 3-04, 3-05, 3-10, 3A-02, 4-08, 
5-02, 5-03, 5-04, 7-03, 7-04, 7-05, 8-03, 8-04, 8-08, 9-03, 9-04, 9-06, 
10-01, 11-01, and 11-02.\5\ In Regulation S-K, we are adopting 
amendments to Items 301, 302, 305, and 503.\6\ We are making technical 
changes to CFRP sections 201.01, 201.02, 213.02(b), and 507.03. We are 
amending Exchange Act Rule 12b-2.\7\ We are amending Securities Act 
Forms S-3, S-4, F-3, and 1-A.\8\ We are amending Exchange Act Schedule 
14A.\9\ Finally, we are amending Exchange Act Form 20-F.\10\
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    \1\ 17 CFR 210.
    \2\ 17 CFR 229.
    \3\ 15 U.S.C. 77a et seq.
    \4\ 15 U.S.C. 78a et seq.
    \5\ 17 CFR 210.1-02, 210.3-01, 210.3-04, 210.3-05, 210.3-10, 
210.3A-02, 210.4-08, 210.5-02, 210.5-03, 210.5-04, 210.7-03, 210.7-
04, 210.7-05, 210.8-03, 210.8-04, 210.8-08, 210.9-03, 210.9-04, 
210.9-06, 210.10-01, 210.11-01, and 210.11-02.
    \6\ 17 CFR 229.301, 229.302, 229.305, and 229.503.
    \7\ 17 CFR 240.12b-2.
    \8\ 17 CFR 239.13, 239.25, 239.33, and 239.90.
    \9\ 17 CFR 240.14a-101.
    \10\ 17 CFR 249.220f.
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I. Background and Summary

    On April 25, 2003, the Commission issued a policy statement 
recognizing the FASB's financial accounting and reporting standards as 
``generally accepted'' for purposes of the Federal securities laws.\11\ 
The Commission's rules and regulations generally require compliance 
with U.S. generally accepted accounting principles (``GAAP''),\12\ and 
the requirements of the Commission's rules, forms and schedules 
generally are used to interpret, supplement, or expand upon GAAP 
requirements. The purpose of these technical amendments and revisions 
is to eliminate obsolete terminology and revise reporting and 
disclosure requirements as necessary to achieve consistency between the 
Commission's compliance requirements and SFAS 141(R) and SFAS 160, both 
issued by the FASB in December 2007.
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    \11\ See Financial Reporting Release No. 70.
    \12\ See, e.g., Rule 4-01(a)(1) of Regulation S-X [17 CFR 210.4-
01(a)(1)].
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II. Business Combinations

    The FASB issued SFAS 141(R), Business Combinations, in December 
2007. SFAS 141(R) is effective at the beginning of the first annual 
reporting period beginning on or after December 15, 2008. SFAS 141(R) 
addresses the accounting for all transactions in which an enterprise 
obtains control of one or more other businesses. The new standard 
retains the fundamental requirement in SFAS 141 that the acquisition 
method of accounting (called the ``purchase method'' in SFAS 141) be 
used for all business combinations. The existing requirement that an 
acquirer be identified for each business combination also was not 
modified. SFAS 141(R) defines the acquirer as the enterprise that 
obtains control of one or more businesses and establishes the 
acquisition date as the date control is achieved. The application of 
SFAS 141 was limited to business combinations in which control was 
obtained by transfer of consideration. SFAS 141(R) requires that the 
acquisition method of accounting be applied to all transactions and 
other events in which one entity obtains control over one or more 
businesses. In addition, SFAS 141(R) generally requires an acquirer to 
recognize assets acquired, liabilities assumed and any noncontrolling 
interest in the acquiree at their fair values as of the acquisition 
date (rather than the announcement date as required in SFAS 141). SFAS 
141(R) also makes significant changes in accounting for contingencies, 
goodwill, bargain purchases and income taxes related to business 
combinations.

III. Noncontrolling Interests in Consolidated Financial Statements

    The FASB issued SFAS 160, Noncontrolling Interests in Consolidated 
Financial Statements--an amendment of ARB 51, in December 2007. SFAS 
160 is effective for fiscal years and interim periods within those 
fiscal years beginning on or after December 15, 2008. SFAS 160 amends 
ARB 51 \13\ to establish accounting and reporting standards for the 
noncontrolling interest in a subsidiary and for the deconsolidation of 
a subsidiary. It specifies that a noncontrolling interest in a 
subsidiary is an ownership interest in the consolidated entity that 
should be reported as equity in the consolidated financial statements. 
Prior to the advent of SFAS 160, little guidance existed for reporting 
noncontrolling interests. As a result, there were widely divergent 
practices for reporting such outside interests.
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    \13\ ARB 51 is Accounting Research Bulletin No. 51, Consolidated 
Financial Statements, adopted in August 1959 by the Committee on 
Accounting Procedure of the Accounting Principles Board.
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    Most significantly, SFAS 160 changes the way the consolidated 
income statement is presented. It requires consolidated net income to 
be reported at amounts that include the amounts attributable to both 
the parent and the noncontrolling interest. In this regard, it requires 
disclosure on the face of the consolidated statement of income of the 
consolidated net income attributable to the parent and to the 
noncontrolling interest. Further, SFAS 160 establishes that all changes 
in a parent's ownership interest in a subsidiary shall be accounted for 
as equity transactions as

[[Page 18613]]

long as the parent retains a controlling financial interest in the 
subsidiary. In addition, SFAS 160 requires that a parent recognize a 
gain or loss when a subsidiary is deconsolidated. Finally, SFAS 160 
significantly expands disclosures in the consolidated financial 
statements regarding the interests of the parent's owners and the 
interests of noncontrolling owners.

IV. Summary of Amendments

    The table which follows is presented as a guide to assist the 
reader in understanding the various changes being made by the technical 
amendments that are described at the end of this release. The table 
presents a brief description of each category of the changes and an 
explanation of the rationale for each change. Conforming amendments are 
being made to update the CFRP.

------------------------------------------------------------------------
               Amendment                            Rationale
------------------------------------------------------------------------
Amend various rules in Regulation S-X,   These amendments will replace
 items in Regulation S-K, and forms and   references to ``minority
 schedules filed under the Securities     interests'' with
 Act and the Exchange Act to replace      ``noncontrolling interests''
 references to ``minority interests''     in order to be consistent with
 with ``noncontrolling interests.''       SFAS 160.
Under Regulation S-X, delete paragraphs  SFAS 160 requires that
 12 of Rule 5-03, 10 of Rule 7-04, and    consolidated financial
 14(e) of Rule 9-04.                      statements report the net
                                          income attributable to the
                                          parent (or controlling
                                          interest) and the net income
                                          attributable to the
                                          noncontrolling interest. These
                                          amendments will make the rules
                                          consistent with this
                                          requirement.
Under Regulation S-X, delete paragraphs  SFAS 160 requires that
 27 of Rule 5-02, 20 of Rule 7-03, and    noncontrolling interests be
 18 of Rule 9-03.                         presented in the consolidated
                                          statement of financial
                                          position within the equity
                                          section separate from the
                                          parent's equity. These
                                          amendments will eliminate the
                                          Commission's current
                                          requirement to present equity
                                          attributable to the
                                          noncontrolling interest
                                          outside of the consolidated
                                          equity section.
Amend various rules in Regulation S-X,   These amendments will eliminate
 items in Regulation S-K, and forms and   ``pooling of interests''
 schedules filed under the Securities     accounting by registrants in
 Act and the Exchange Act to rescind      accordance with the
 guidance related to business             requirements of SFAS 141(R).
 combinations accounted for as
 ``pooling of interests'' and update
 references to specify which rules
 apply to combinations of entities
 under common control.
Amend various rules in Regulation S-X,   SFAS 160 requires net income or
 items in Regulation S-K, and forms and   loss be attributed to the
 schedules filed under the Securities     parent (or controlling
 Act and the Exchange Act to              interest) and the
 distinguish between income               noncontrolling interest. These
 attributable to a noncontrolling         amendments will make the rules
 interest and income attributable to a    consistent with this
 controlling interest.                    requirement.
Amend various rules in Regulation S-X,   Under SFAS 141(R), a business
 items in Regulation S-K, and forms and   combination can occur in the
 schedules filed under the Securities     absence of a purchase
 Act and the Exchange Act to remove the   transaction. These amendments
 term ``purchase method.''                will update the terminology in
                                          order to achieve consistency
                                          with SFAS 141(R).
Amend Rule 3-04 under Regulation S-X to  This amendment will conform
 require a separate schedule in the       Rule 3-04 to the requirements
 notes to the financial statements that   of SFAS 160.
 shows the effects of any changes in
 the registrant's ownership interest in
 a subsidiary to the equity
 attributable to the registrant.
------------------------------------------------------------------------

V. Certain Findings

    Under the Administrative Procedure Act, a notice of proposed 
rulemaking is not required when the agency, for good cause, finds that 
notice and public comment are impracticable, unnecessary, or contrary 
to the public interest.\14\ These amendments are technical changes to 
eliminate obsolete terminology and revise reporting and disclosure 
requirements as necessary to achieve consistency between the 
Commission's compliance requirements and SFAS 141(R) and SFAS 160. 
Because no one is likely to want to comment on such non-substantive, 
technical amendments, the Commission finds that it is unnecessary to 
publish notice of these amendments.\15\
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    \14\ 5 U.S.C. 553(b).
    \15\ For similar reasons, the amendments do not require analysis 
under the Regulatory Flexibility Act or analysis of major rule 
status under the Small Business Regulatory Enforcement Fairness Act. 
See 5 U.S.C. 601(2) (for purposes of Regulatory Flexibility Act 
analysis, the term ``rule'' means any rule for which the agency 
publishes a general notice of proposed rulemaking); and 5 U.S.C. 
804(3)(C) (for purposes of Congressional review of agency 
rulemaking, the term ``rule'' does not include any rule of agency 
organization, procedure or practice that does not substantially 
affect the rights or obligations of non-agency parties).
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    The Administrative Procedure Act also requires publication of a 
rule at least 30 days before its effective date unless the agency finds 
otherwise for good cause.\16\ Due to the need to coordinate the 
effectiveness of the amendments with the effective dates of SFAS 141(R) 
and SFAS 160 and for the same reasons described with respect to 
opportunity for notice and comment, the Commission finds there is good 
cause for the amendments to take effect on April 23, 2009.
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    \16\ See 5 U.S.C. 553(d)(3).
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VI. Consideration of Competitive Effects of Amendments

    Section 23(a)(2) of the Exchange Act requires the Commission, in 
adopting rules under the Exchange Act, to consider the competitive 
effects of such rules, if any, and to refrain from adopting a rule that 
would impose a burden on competition not necessary or appropriate in 
furtherance of the purposes of the Exchange Act.\17\ Because these 
amendments merely make technical changes to update references to 
applicable FASB pronouncements, we do not anticipate any competitive 
advantages or disadvantages will be created.
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    \17\ 15 U.S.C. 78w(a)(2).
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VII. Update to Codification of Financial Reporting Policies

    The Commission amends the ``Codification of Financial Reporting 
Policies'' announced in Financial Reporting Release 1 (April 15, 1982) 
[47 FR 21028] as follows:
    1. By removing and reserving Sections 201.01 and 201.02.
    2. By revising Section 213.02(b) to replace the term ``minority 
interest'' in each place it appears with the term ``noncontrolling 
interest''.
    3. By revising Section 507.03 to replace the term ``minority 
interest'' in each place it appears with the term ``noncontrolling 
interest''.

[[Page 18614]]

    The CFRP is a separate publication issued by the Commission. It 
will not be published in the Federal Register or Code of Federal 
Regulations. For more information about the CFRP, contact the 
Commission's Public Reference Room at (202) 551-5850.

VIII. Statutory Basis and Text of Amendments

    We are adopting these technical amendments pursuant to Sections 6, 
7, 10 and 19(a) of the Securities Act,\18\ and Sections 12, 13, 14(a), 
15(d) and 23(a) of the Exchange Act.\19\
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    \18\ 15 U.S.C. 77f, 77g, 77j, and 77s(a).
    \19\ 15 U.S.C. 78l, 78m, 78n(a), 78o(d), and 78w(a).
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List of Subjects in 17 CFR Parts 210, 211, 229, 239, 240, and 249

    Accounting, Reporting and recordkeeping requirements, Securities.

Text of Amendments

0
For the reasons set out in the preamble, Title 17, Chapter II, of the 
Code of Federal Regulations is amended as follows:

PART 210--FORM AND CONTENT OF AND REQUIREMENTS FOR FINANCIAL 
STATEMENTS, SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 
1934, PUBLIC UTILITY HOLDING COMPANY ACT OF 1935, INVESTMENT 
COMPANY ACT OF 1940, INVESTMENT ADVISERS ACT OF 1940, AND ENERGY 
POLICY AND CONSERVATION ACT OF 1975

0
1. The authority citation for part 210 is revised to read as follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 
77aa(25), 77aa(26), 77nn(25), 77nn(26), 78c, 78j-1, 78l, 78m, 78n, 
78o(d), 78q, 78u-5, 78w, 78ll, 78mm, 80a-8, 80a-20, 80a-29, 80a-30, 
80a-31, 80a-37(a), 80b-3, 80b-11, 7202 and 7262, unless otherwise 
noted.

0
2. Amend Sec.  210.1-02 by revising paragraphs (w)(1) and (w)(3), the 
Computational Notes 1 and 2 following the Note to paragraph (w), 
(bb)(1)(i) and (bb)(1)(ii) to read as follows:


Sec.  210.1-02  Definitions of terms used in Regulation S-X (17 CFR 
part 210).

* * * * *
    (w) * * *
    (1) The registrant's and its other subsidiaries' investments in and 
advances to the subsidiary exceed 10 percent of the total assets of the 
registrant and its subsidiaries consolidated as of the end of the most 
recently completed fiscal year (for a proposed combination between 
entities under common control, this condition is also met when the 
number of common shares exchanged or to be exchanged by the registrant 
exceeds 10 percent of its total common shares outstanding at the date 
the combination is initiated); or
* * * * *
    (3) The registrant's and its other subsidiaries' equity in the 
income from continuing operations before income taxes, extraordinary 
items and cumulative effect of a change in accounting principle of the 
subsidiary exclusive of amounts attributable to any noncontrolling 
interests exceeds 10 percent of such income of the registrant and its 
subsidiaries consolidated for the most recently completed fiscal year.
* * * * *
    Computational note: * * *
    1. When a loss exclusive of amounts attributable to any 
noncontrolling interests has been incurred by either the parent and 
its subsidiaries consolidated or the tested subsidiary, but not 
both, the equity in the income or loss of the tested subsidiary 
exclusive of amounts attributable to any noncontrolling interests 
should be excluded from such income of the registrant and its 
subsidiaries consolidated for purposes of the computation.
    2. If income of the registrant and its subsidiaries consolidated 
exclusive of amounts attributable to any noncontrolling interests 
for the most recent fiscal year is at least 10 percent lower than 
the average of the income for the last five fiscal years, such 
average income should be submitted for purposes of the computation. 
Any loss years should be omitted for purposes of computing average 
income.
* * * * *
    (bb) * * *
    (1) * * *
    (i) Current assets, noncurrent assets, current liabilities, 
noncurrent liabilities, and, when applicable, redeemable preferred 
stocks (see Sec.  210.5-02.27) and noncontrolling interests (for 
specialized industries in which classified balance sheets are normally 
not presented, information shall be provided as to the nature and 
amount of the majority components of assets and liabilities);
    (ii) Net sales or gross revenues, gross profit (or, alternatively, 
costs and expenses applicable to net sales or gross revenues), income 
or loss from continuing operations before extraordinary items and 
cumulative effect of a change in accounting principle, net income or 
loss, and net income or loss attributable to the entity (for 
specialized industries, other information may be substituted for sales 
and related costs and expenses if necessary for a more meaningful 
presentation); and
* * * * *

0
3. Amend Sec.  210.3-01 by revising paragraphs (c)(2) and (c)(3) to 
read as follows:


Sec.  210.3-01  Consolidated balance sheets.

* * * * *
    (c) * * *
    (2) For the most recent fiscal year for which audited financial 
statements are not yet available the registrant reasonably and in good 
faith expects to report income attributable to the registrant, after 
taxes but before extraordinary items and cumulative effect of a change 
in accounting principle; and
    (3) For at least one of the two fiscal years immediately preceding 
the most recent fiscal year the registrant reported income attributable 
to the registrant, after taxes but before extraordinary items and 
cumulative effect of a change in accounting principle.
* * * * *

0
4. Revise Sec.  210.3-04 to read as follows:


Sec.  210.3-04  Changes in stockholders' equity and noncontrolling 
interests.

    An analysis of the changes in each caption of stockholders' equity 
and noncontrolling interests presented in the balance sheets shall be 
given in a note or separate statement. This analysis shall be presented 
in the form of a reconciliation of the beginning balance to the ending 
balance for each period for which an income statement is required to be 
filed with all significant reconciling items described by appropriate 
captions with contributions from and distribution to owners shown 
separately. Also, state-separately the adjustments to the balance at 
the beginning of the earliest period presented for items which were 
retroactively applied to periods prior to that period. With respect to 
any dividends, state the amount per share and in the aggregate for each 
class of shares. Provide a separate schedule in the notes to the 
financial statements that shows the effects of any changes in the 
registrant's ownership interest in a subsidiary on the equity 
attributable to the registrant.

0
5. In Sec.  210.3-05, revise paragraphs (a)(1)(i) and (a)(1)(ii), and 
remove the authority citation at the end of the section to read as 
follows:


Sec.  210.3-05  Financial statements of businesses acquired or to be 
acquired.

    (a) * * *
    (1) * * *
    (i) A business combination has occurred or is probable (for 
purposes of this section, this encompasses the acquisition of an 
interest in a business accounted for by the equity method); or

[[Page 18615]]

    (ii) Consummation of a combination between entities under common 
control is probable.
* * * * *

0
6. Amend Sec.  210.3-10 by revising paragraph (i)(3) to read as 
follows:


Sec.  210.3-10  Financial statements of guarantors and issuers of 
guaranteed securities registered or being registered.

* * * * *
    (i) * * *
    (3) The parent company column should present investments in all 
subsidiaries based upon their proportionate share of the subsidiary's 
net assets;
* * * * *


Sec.  210.3A-02  [Amended]

0
7. Amend Sec.  210.3A-02 by:
0
a. Revising paragraph (a), third sentence, the phrase ``or in 
bankruptcy, or when control is likely to be temporary).'' to read ``or 
in bankruptcy).''; and
0
b. Revising paragraph (b)(2), first sentence, the reference ``pooling 
of interests'' to read ``combination between entities under common 
control''.


Sec.  210.4-08  [Amended]

0
8. In Sec.  210.4-08, in the last sentence of paragraph (e)(3) 
introductory text, remove the phrase ``(Sec.  210.5-02.28) and minority 
interests'' and add in its place the phrase ``(Sec.  210.5-02.27) and 
noncontrolling interests''.
0
9. Amend Sec.  210.5-02 by:
0
a. Removing the undesignated heading ``Minority Interests'' following 
paragraph 26;
0
b. Removing paragraph 27;
0
c. Redesignating paragraphs 28, 29, 30, and 31 as paragraphs 27, 28, 
29, and 30;
0
d. Revising the reference ``Sec.  210.5-02.29'' in newly redesignated 
paragraph 27, last sentence, to read ``Sec.  210.5-02.28'';
0
e. Adding an undesignated heading following newly redesignated 
paragraph 30 and a new paragraph 31; and
0
f. Revising paragraph 32.
0
g. Remove the authority citation at the end of the section.
    The additions and revisions read as follows:


Sec.  210.5-02  Balance sheets.

* * * * *
    30. * * *
    Noncontrolling Interests
    31. Noncontrolling interests in consolidated subsidiaries. State 
separately in a note the amounts represented by preferred stock and the 
applicable dividend requirements if the preferred stock is material in 
relation to the consolidated equity.
    32. Total liabilities and equity.
0
10. Amend Sec.  210.5-03 by:
0
a. Removing paragraph 12 and redesignating paragraphs 13, 14, 15, 16, 
17, 18, and 19 as paragraphs 12, 13, 14, 15, 16, 17, and 18;
0
b. Redesignating paragraph 20 as paragraph 21; and
0
c. Adding new paragraphs 19 and 20.
    The additions read as follows:


Sec.  210.5-03  Income statements.

* * * * *
    19. Net income attributable to the noncontrolling interest.
    20. Net income attributable to the controlling interest.
* * * * *


Sec.  210.5-04  [Amended]

0
11. Amend Sec.  210.5-04, Schedule I, last sentence, by revising the 
phrase ``(Sec.  210.5-02.28) and minority interests'' to read ``(Sec.  
210.5-02.27) and noncontrolling interests''.
0
12. Remove the authority citation for Sec. Sec.  210.7-01 through 
210.7-05 following the undesignated heading ``Insurance Companies''.
0
13. Amend Sec.  210.7-03 by:
0
a. Removing the undesignated heading ``Minority Interests'' preceding 
paragraph 20;
0
b. Removing paragraph 20;
0
c. Redesignating paragraphs 21, 22, 23, and 24 as paragraphs 20, 21, 
22, and 23;
0
d. Revising newly redesignated paragraphs 20, 21, 22, and 23(b);
0
e. Adding an undesignated heading following newly redesignated 
paragraph 23(c) and a new paragraph 24; and
0
f. Revising paragraph 25.
    The revisions and addition read as follows:


Sec.  210.7-03  Balance sheets.

* * * * *
    20. Preferred stocks subject to mandatory redemption requirements 
or whose redemption is outside the control of the issuer. The 
classification and disclosure requirements of Sec.  210.5-02.27 shall 
be followed.
* * * * *
    21. Preferred stocks which are not redeemable or are redeemable 
solely at the option of the issuer. The classification and disclosure 
requirements of Sec.  210.5-02.28 shall be followed.
* * * * *
    22. Common stocks. The classification and disclosure requirements 
of Sec.  210.5-02.29 shall be followed.
* * * * *
    23. * * *
    (b) The classification and disclosure requirements of Sec.  210.5-
02.30(b) shall be followed for dating and effect of a quasi-
reorganization.
* * * * *
    Noncontrolling Interests
    24. Noncontrolling interests in consolidated subsidiaries. The 
disclosure requirements of Sec.  210.5-02.31 shall be followed.
    25. Total liabilities and equity.

0
14. Amend Sec.  210.7-04 by:
0
a. Removing paragraph 10;
0
b. Redesignating paragraphs 11, 12, 13, 14, 15, 16, and 17 as 
paragraphs 10, 11, 12, 13, 14, 15, and 16;
0
c. Redesignating paragraph 18 as paragraph 19; and
0
d. Adding new paragraphs 17 and 18.
    The additions read as follows:


Sec.  210.7-04  Income statements.

* * * * *
    17. Net income attributable to the noncontrolling interest.
    18. Net income attributable to the controlling interest.
* * * * *


Sec.  210.7-05  [Amended]

0
15. Amend Sec.  210.7-05:
0
a. In Schedule II, in the last sentence, remove the reference ``(Sec.  
210.7-03.21) and minority interests'' and add in its place the 
reference ``(Sec.  210.7-03.20) and noncontrolling interests''.
0
b. Remove the authority citation at the end of the section.
0
16. In Sec.  210.8-03, revise paragraphs (b)(3) and (b)(4) to read as 
follows:


Sec.  210.8-03  Interim financial statements.

* * * * *
    (b) * * *
    (3) Significant equity investees. Sales, gross profit, net income 
(loss) from continuing operations, net income, and net income 
attributable to the investee must be disclosed for equity investees 
that constitute 20 percent or more of a registrant's consolidated 
assets, equity or income from continuing operations attributable to the 
registrant.
    (4) Significant dispositions and business combinations. If a 
significant disposition or business combination has occurred during the 
most recent interim period and the transaction required the filing of a 
Form 8-K (Sec.  249.308 of this chapter), pro forma data must be 
presented that reflects revenue, income from continuing operations, net 
income, net income attributable to the registrant and income per share 
for the current interim period and the corresponding interim period of 
the preceding fiscal year as though the transaction occurred at the 
beginning of the periods.
* * * * *

[[Page 18616]]

Sec.  210.8-04  [Amended]

0
17. Amend Sec.  210.8-04 by:
0
a. Revising paragraph (a), first sentence, the phrase ``If a business 
combination accounted for as a `purchase' has occurred or is 
probable,'' to read ``If a business combination has occurred or is 
probable,'';
0
b. Revising paragraph (a)(1) to read ``This encompasses the purchase of 
an interest in a business accounted for by the equity method.'';
0
c. Revising paragraph (b)(3), the phrase ``of the acquiree'' to read 
``of the acquiree exclusive of amounts attributable to any 
noncontrolling interests''; and
0
d. Revising Computational note to Sec.  210.8-04(b), the first 
sentence, the phrase ``its subsidiaries consolidated'' to read ``its 
subsidiaries consolidated exclusive of amounts attributable to any 
noncontrolling interests''.
0
18. Amend Sec.  210.8-08 by revising paragraphs (b)(2) and (b)(3) to 
read as follows:


Sec.  210.8-08  Age of financial statements.

* * * * *
    (b) * * *
    (2) For the most recent fiscal year for which audited financial 
statements are not yet available, the smaller reporting company 
reasonably and in good faith expects to report income from continuing 
operations attributable to the registrant before taxes; and
    (3) For at least one of the two fiscal years immediately preceding 
the most recent fiscal year the smaller reporting company reported 
income from continuing operations attributable to the registrant before 
taxes.

0
19. Amend Sec.  210.9-03 by:
0
a. Removing paragraph 18;
0
b. Redesignating paragraphs 19, 20, 21, and 22 as paragraphs 18, 19, 
20, and 21;
0
c. Revising redesignated paragraphs 18, 19, 20, and 21;
0
d. Adding an undesignated heading following redesignated paragraph 21;
0
e. Adding new paragraph 22; and
0
f. Revising paragraph 23.
0
g. Remove the authority citation at the end of the section.
    The revisions and addition read as follows:


Sec.  210.9-03  Balance sheets.

* * * * *
    18. Preferred stocks subject to mandatory redemption requirements 
or whose redemption is outside the control of the issuer. See Sec.  
210.5-02.27.
* * * * *
    19. Preferred stocks which are not redeemable or are redeemable 
solely at the option of the issuer. See Sec.  210.5-02.28.
* * * * *
    20. Common stocks. See Sec.  210.5-02.29.
* * * * *
    21. Other stockholders' equity. See Sec.  210.5-02.30.
    Noncontrolling Interests
    22. Noncontrolling interests in consolidated subsidiaries. The 
disclosure requirements of Sec.  210.5-02.31 shall be followed.
    23. Total liabilities and equity.

0
20. Amend Sec.  210.9-04 by:
0
a. Removing paragraph 14(e);
0
b. Redesignating paragraph 21 as paragraph 23; and
0
c. Adding new paragraphs 21 and 22.
    The additions read as follows:


Sec.  210.9-04  Income statements.

* * * * *
    21. Net income attributable to the noncontrolling interest.
    22. Net income attributable to the controlling interest.

0
21. Amend Sec.  210.9-06 by revising the last sentence to read as 
follows:
* * * * *


Sec.  210.9-06  Condensed financial information of registrant.

    * * * Redeemable preferred stocks (Sec.  210.5-02.27) and 
noncontrolling interests shall be deducted in computing net assets for 
purposes of this test.

0
22. Amend Sec.  210.10-01 by revising paragraphs (b)(3) and (b)(4) to 
read as follows:


Sec.  210.10-01  Interim financial statements.

* * * * *
    (b) * * *
    (3) If, during the most recent interim period presented, the 
registrant or any of its consolidated subsidiaries entered into a 
combination between entities under common control, the interim 
financial statements for both the current year and the preceding year 
shall reflect the combined results of the combined businesses. 
Supplemental disclosure of the separate results of the combined 
entities for periods prior to the combination shall be given, with 
appropriate explanations.
    (4) Where a material business combination has occurred during the 
current fiscal year, pro forma disclosure shall be made of the results 
of operations for the current year up to the date of the most recent 
interim balance sheet provided (and for the corresponding period in the 
preceding year) as though the companies had combined at the beginning 
of the period being reported on. This pro forma information shall, at a 
minimum, show revenue, income before extraordinary items and the 
cumulative effect of accounting changes, including such income on a per 
share basis, net income, net income attributable to the registrant, and 
net income per share.
* * * * *


Sec. Sec.  210.11-01--210.11-03  [Amended]

0
23. Remove the authority citation for Sec. Sec.  210.11-01 through 
210.11-03 following the undesignated heading ``Pro Forma Financial 
Information''.
0
24. Amend Sec.  210.11-01 by revising paragraphs (a)(1) and (a)(2) to 
read as follows:


Sec.  210.11-01  Presentation requirements.

    (a) * * *
    (1) During the most recent fiscal year or subsequent interim period 
for which a balance sheet is required by Sec.  210.3-01, a significant 
business combination has occurred (for purposes of these rules, this 
encompasses the acquisition of an interest in a business accounted for 
by the equity method);
    (2) After the date of the most recent balance sheet filed pursuant 
to Sec.  210.3-01, consummation of a significant business combination 
or a combination of entities under common control has occurred or is 
probable;
* * * * *

0
25. Amend Sec.  210.11-02 by revising paragraph (b)(3) and the first 
sentence of Instruction 2 to read as follows:


Sec.  210.11-02  Preparation requirements.

* * * * *
    (b) * * *
    (3) The pro forma condensed financial information need only include 
major captions (i.e., the numbered captions) prescribed by the 
applicable sections of this Regulation. Where any major balance sheet 
caption is less than 10 percent of total assets, the caption may be 
combined with others. When any major income statement caption is less 
than 15 percent of average net income attributable to the registrant 
for the most recent three fiscal years, the caption may be combined 
with others. In calculating average net income attributable to the 
registrant, loss years should be excluded unless losses were incurred 
in each of the most recent three years, in which case the average loss 
shall be used for purposes of this test. Notwithstanding these tests, 
de minimis amounts need not be shown separately.
* * * * *
    Instructions: * * *
    2. For a business combination, pro forma adjustments for the income

[[Page 18617]]

statement shall include amortization, depreciation and other 
adjustments based on the allocated purchase price of net assets 
acquired. * * *
* * * * *

PART 211--INTERPRETATIONS RELATING TO FINANCIAL REPORTING MATTERS

0
26. Amend part 211, subpart A, by adding ``Technical Amendments to 
Rules, Forms, Schedules and Codification of Financial Reporting 
Policies'', Release No. FR-79 and the release date of April 15, 2009 to 
the list of interpretive releases.

PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES 
ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND 
CONSERVATION ACT OF 1975--REGULATION S-K

0
27. The authority citation for part 229 continues to read in part as 
follows:

    Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 
77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 777iii, 
77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78l, 78m, 78n, 78o, 78u-5, 78w, 
78ll, 78mm, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a-31(c), 80a-37, 
80a-38(a), 80a-39, 80b-11, and 7201 et seq.; 18 U.S.C. 1350, unless 
otherwise noted.
* * * * *


Sec.  229.301  [Amended]

0
28. Amend Sec.  229.301, Instruction 2 to the Instructions to Item 301, 
first sentence, by revising the reference ``Sec.  210.5-02.28(a)'' to 
read ``Sec.  210.5-02.27(a)''.
0
29. Amend Sec.  229.302 by revising paragraphs (a)(1) and (a)(2) to 
read as follows:


Sec.  229.302  (Item 302) Supplementary financial information.

    (a) * * *
    (1) Disclosure shall be made of net sales, gross profit (net sales 
less costs and expenses associated directly with or allocated to 
products sold or services rendered), income (loss) before extraordinary 
items and cumulative effect of a change in accounting, per share data 
based upon such income (loss), net income (loss) and net income (loss) 
attributable to the registrant, for each full quarter within the two 
most recent fiscal years and any subsequent interim period for which 
financial statements are included or are required to be included by 
Article 3 of Regulation S-X (Part 210 of this chapter).
    (2) When the data supplied pursuant to paragraph (a) of this 
section vary from the amounts previously reported on the Form 10-Q 
(Sec.  249.308a of this chapter) filed for any quarter, such as would 
be the case when a combination between entities under common control 
occurs or where an error is corrected, reconcile the amounts given with 
those previously reported and describe the reason for the difference.
* * * * *


Sec.  229.305  [Amended]

0
30. Amend Sec.  229.305, Instruction 3.C.ii., General Instructions to 
Paragraphs 305(a) and 305(b), first sentence, by revising the reference 
``minority interests'' to read ``noncontrolling interests''.
0
31. Amend Sec.  229.503 by revising Instruction 1.(C) to the 
Instructions to paragraph 503(d) to read as follows:


Sec.  229.503  (Item 503) Prospectus summary, risk factors, and ratio 
of earnings to fixed charges.

* * * * *
    Instructions to paragraph 503(d):
    1. Definitions. * * *
    (C) Earnings. The term ``earnings'' is the amount resulting from 
adding and subtracting the following items. Add the following: (a) pre-
tax income from continuing operations before adjustment for income or 
loss from equity investees; (b) fixed charges; (c) amortization of 
capitalized interest; (d) distributed income of equity investees; and 
(e) your share of pre-tax losses of equity investees for which charges 
arising from guarantees are included in fixed charges. From the total 
of the added items, subtract the following: (a) interest capitalized; 
(b) preference security dividend requirements of consolidated 
subsidiaries; and (c) the noncontrolling interest in pre-tax income of 
subsidiaries that have not incurred fixed charges. Equity investees are 
investments that you account for using the equity method of accounting. 
Public utilities following SFAS 71 should not add amortization of 
capitalized interest in determining earnings, nor reduce fixed charges 
by any allowance for funds used during construction.
* * * * *

PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

0
32. The authority citation for part 239 continues to read in part as 
follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 
77sss, 78c, 78l, 78m, 78n, 78o(d), 78u-5, 78w(a), 78ll, 78mm, 80a-
2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-13, 80a-24, 80a-26, 80a-29, 
80a-30, and 80a-37, unless otherwise noted.
* * * * *
0
33. Amend Form S-3 (referenced in Sec.  239.13) by revising Item 
11(b)(iii) to read as follows:
    [Note: The text of Form S-3 does not, and this amendment will 
not, appear in the Code of Federal Regulations.]

Form S-3

Registration Statement Under the Securities Act of 1933

* * * * *
    Item 11. Material Changes.
* * * * *
    (b) * * * (iii) restated financial statements prepared in 
accordance with Regulation S-X where a combination of entities under 
common control has been consummated subsequent to the most recent 
fiscal year and the transferred businesses, considered in the 
aggregate, are significant pursuant to Rule 11-01(b), or * * *
* * * * *
0
34. Amend Form S-4 (referenced in Sec.  239.25) by revising the 
Instruction to paragraphs (e) and (f) in Item 3 and Item 12(b)(2)(iv) 
to read as follows:

    [Note: The text of Form S-4 does not, and this amendment will 
not, appear in the Code of Federal Regulations.]

Form S-4

Registration Statement Under the Securities Act of 1933

* * * * *
    Item 3. Risk Factors, Ratio of Earnings to Fixed Charges and Other 
Information.
* * * * *
    Instruction to paragraphs (e) and (f).
    For a business combination, the financial information required by 
paragraphs (e) and (f) shall be presented only for the most recent 
fiscal year and interim period. For a combination between entities 
under common control, the financial information required by paragraphs 
(e) and (f) (except for information with regard to book value) shall be 
presented for the most recent three fiscal years and interim period. 
For a combination between entities under common control, information 
with regard to book value shall be presented as of the end of the most 
recent fiscal year and interim period. Equivalent pro forma per share 
amounts shall be calculated by multiplying the pro forma income (loss) 
per share before non-recurring charges or credits directly attributable 
to the transaction, pro forma book value per share, and the pro forma 
dividends per share of the registrant by the exchange ratio so that the 
per share amounts are equated to the respective

[[Page 18618]]

values for one share of the company being acquired.
* * * * *
    Item 12. Information with Respect to S-3 Registrants.
* * * * *
    (b) * * *
    (2) * * *
    (iv) restated financial statements prepared in accordance with 
Regulation S-X where a combination under common control has been 
consummated subsequent to the most recent fiscal year and the 
businesses transferred, considered in the aggregate, are significant 
pursuant to Rule 11-01(b) of Regulation S-X; and
* * * * *
0
35. Amend Form F-3 (referenced in Sec.  239.33) by revising Item 
5(b)(1)(iii) to read as follows:

    [Note: The text of Form F-3 does not, and this amendment will 
not, appear in the Code of Federal Regulations.]

Form F-3

Registration Statement Under the Securities Act of 1933

* * * * *
    Item 5. Material Changes.
* * * * *
    (b)(1) * * *
    (iii) restated financial statements where a combination of entities 
under common control has been consummated subsequent to the most recent 
fiscal year and the transferred businesses, considered in the 
aggregate, are significant under Rule 11-01(b) of Regulation S-X; or
* * * * *
0
36. Amend Form 1-A (referenced in Sec.  239.90), Part F/S, by revising 
paragraphs (3)(a)(i), (3)(a)(ii), and (4)(a) to read as follows:

    [Note:
     The text of Form 1-A does not, and this amendment will not, 
appear in the Code of Federal Regulations.]

Form 1-A

Regulation A Offering Statement Under the Securities Act of 1933

* * * * *
Part F/S
* * * * *
    (3) Financial Statements of Businesses Acquired or to be Acquired.
    (a) * * *
    (i) A significant business combination has occurred or is probable 
(for purposes of this rule, this encompasses the acquisition of an 
interest in a business accounted for by the equity method); or
    (ii) Consummation of a combination between entities under common 
control.
* * * * *
    (4) Pro Forma Financial Information.
    (a) Pro forma information shall be furnished if any of the 
following conditions exist (for purposes of this rule, ``business 
combination'' encompasses the acquisition of an interest in a business 
accounted for by the equity method):
    (i) During the most recent fiscal year or subsequent interim period 
for which a balance sheet of the registrant is required, a significant 
business combination has occurred.
    (ii) After the date of the registrant's most recent balance sheet, 
consummation of a significant business combination or a combination 
between entities under common control has occurred or is probable.
* * * * *

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 
1934

0
37. The authority citation for part 240 continues to read in part as 
follows:

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 
78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 
78w, 78x, 78ll, 78mm, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 
80b-11, and 7201 et seq.; and 18 U.S.C. 1350, unless otherwise 
noted.
* * * * *

0
38. Amend Sec.  240.12b-2 to revise the definition of ``Significant 
subsidiary'' and Computational Note following it to read as follows:


Sec.  240.12b-2  Definitions.

* * * * *
    Significant subsidiary. The term significant subsidiary means a 
subsidiary, including its subsidiaries, which meets any of the 
following conditions:
    (1) The registrant's and its other subsidiaries' investments in and 
advances to the subsidiary exceed 10 percent of the total assets of the 
registrant and its subsidiaries consolidated as of the end of the most 
recently completed fiscal year (for a proposed combination between 
entities under common control, this condition is also met when the 
number of common shares exchanged or to be exchanged by the registrant 
exceeds 10 percent of its total common shares outstanding at the date 
the combination is initiated); or
    (2) The registrant's and its other subsidiaries' proportionate 
share of the total assets (after intercompany eliminations) of the 
subsidiary exceeds 10 percent of the total assets of the registrant and 
its subsidiaries consolidated as of the end of the most recently 
completed fiscal year; or
    (3) The registrant's and its other subsidiaries' equity in the 
income from continuing operations before income taxes, extraordinary 
items and cumulative effect of a change in accounting principle of the 
subsidiary exclusive of amounts attributable to any noncontrolling 
interests exceeds 10 percent of such income of the registrant and its 
subsidiaries consolidated for the most recently completed fiscal year.
    Computational note: For purposes of making the prescribed income 
test the following guidance should be applied:
    1. When a loss exclusive of amounts attributable to any 
noncontrolling interests has been incurred by either the parent and its 
subsidiaries consolidated or the tested subsidiary, but not both, the 
equity in the income or loss of the tested subsidiary exclusive of 
amounts attributable to any noncontrolling interests should be excluded 
from such income of the registrant and its subsidiaries consolidated 
for purposes of the computation.
    2. If income of the registrant and its subsidiaries consolidated 
exclusive of amounts attributable to any noncontrolling interests for 
the most recent fiscal year is at least 10 percent lower than the 
average of the income for the last five fiscal years, such average 
income should be substituted for purposes of the computation. Any loss 
years should be omitted for purposes of computing average income.
* * * * *

0
39. Amend Sec.  240.14a-101, Item 14, by revising Instruction 1 to the 
Instructions to paragraphs (b)(8), (b)(9) and (b)(10) to read as 
follows:


Sec.  240.14a-101  Schedule 14A. Information required in proxy 
statement.

* * * * *
    Item 14. * * *
    Instructions to paragraphs (b)(8), (b)(9) and (b)(10):
    1. For a business combination, present the financial information 
required by paragraphs (b)(9) and (b)(10) only for the most recent 
fiscal year and interim period. For a combination between entities 
under common control, present the financial information required by 
paragraphs (b)(9) and (b)(10) (except for information with regard to 
book value) for the most recent three fiscal years and interim period. 
For purposes of these paragraphs, book value information need only be 
provided for the most recent balance sheet date.
* * * * *

[[Page 18619]]

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

0
40. The authority citation for part 249 continues to read in part as 
follows:

    Authority: 15 U.S.C. 78a et seq. and 7201 et seq.; and 18 U.S.C. 
1350, unless otherwise noted.
* * * * *

0
41. Amend Form 20-F (referenced in Sec.  249.220f) by, in Item 11, 
General Instructions to Items 11(a) and 11(b), revising Instruction 
3.C.ii to read as follows:

    [Note:
     The text of Form 20-F does not, and this amendment will not, 
appear in the Code of Federal Regulations.]

Form 20-F

* * * * *
    Item 11. Quantitative and Qualitative Disclosures About Market 
Risk.
* * * * *
    General Instructions to Items 11(a) and 11(b).
* * * * *
    3. * * *
    C.i. * * *
    ii. Other financial instruments exclude employers and plans 
obligations for pension and other post-retirement benefits, 
substantively extinguished debt, insurance contracts, lease contracts, 
warranty obligations and rights, unconditional purchase obligations, 
investments accounted for under the equity method, noncontrolling 
interests in consolidated enterprises, and equity instruments issued by 
the registrant and classified in stockholders' equity in the statement 
of financial position (see, e.g., FAS 107, paragraph 8 (December 
1991)). For purposes of this item, trade accounts receivable and trade 
accounts payable need not be considered other financial instruments 
when their carrying amounts approximate fair value; and
* * * * *

    By the Commission.

    Dated: April 15, 2009.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-9089 Filed 4-22-09; 8:45 am]

BILLING CODE 8010-01-P
