Publications

Corporate Partners Michael Nathan and Karen Hsu Kelley and Corporate Associate Yafit Cohn published an article in Law360, “Segment Reporting Lessons From A Recent SEC Action.” The article discusses the Financial Accounting Standards Board’s Accounting Standards Codification 280 (“ASC 280”), which requires each public company to disclose certain information regarding its reportable segments in both annual financial statements and financial statements for interim periods. The article further examines a recent SEC enforcement action brought against PowerSecure International Inc. for its alleged failure to accurately report and identify its segments as required by ASC 280. According to the authors, two key factors likely to have influenced the SEC’s determination to pursue an enforcement action in this instance were the company’s failure to disclose its business inefficiencies in a particular area of its business before disclosing a loss and the company’s failure to make impairment charges due to its aggregation of businesses under its single reportable segment. The authors conclude that the enforcement action is a crucial reminder of the importance of complying with GAAP in in identifying a public entity’s operating and reportable segments.

To read the article in full, please click here.