The Securities and Exchange Commission: disclosure required in Q1 reports regarding Corona impact

The Securities and Exchange Commission has issued a new guidance document with highlights regarding the disclosure required in the first quarter and overall reports, in light of the impact of the Corona crisis on the activities of the reporting corporations. According to the guidelines, companies will be required to provide material information on material effects that occurred after the end of the first quarter, to address material effects of the Corona crisis on operations, including a separate reference to the period when there were restrictions on the economy.
Authority staff emphasize that current and hourly corporate reports are intended to enable investors to understand the state of a corporation and its investment viability, even in routine times, and light and material in times of crisis, such as the present, which are characterized by significant uncertainty.
The PA's staff also notes that naturally, the investor public will have to consider that some of the information presented in the reports is provided under exceptional conditions of uncertainty and is therefore based on different estimates and assumptions. Although many estimates and assumptions may not be realized, there is still great value in providing information to reflect how corporations assess their situation.
According to the authority's guidelines, due to the spread of the Corona virus and the deepening of the crisis in the period following the end of the first quarter, disclosures about material effects and developments that occurred after the end of the quarter and close to the date of publication of the report should also be included.
According to the Authority's guidelines, the Board of Directors' report should include a description and analysis of the important trends, risks and exposures created to the corporation due to the consequences of the Corona crisis and the way the company is dealing with them. In addition, it is required to provide crisis impact analysis on non-GAAP metrics included in past reports.
Due to the fact that during the first quarter and thereafter traffic restrictions were imposed in Israel and various countries around the world, the first quarter includes a period during which business activity was operating as usual, and a period during which activity was affected by the restrictions. Therefore, it is necessary to include an analysis that will enable an understanding of the impact of the limitations imposed on the company while analyzing the results for the said periods.