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ARTICLE · 03 FEBRUARY 2014

MD&A: Don’t Forget Material Trends And Uncertainties

Morgan Lewis
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The analysis of known trends and uncertainties is critical when preparing the Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) section for annual reports on Form 10-K and quarterly reports on Form 10-Q.

United StatesAccounting and Audit
Linda Griggs
Linda Griggs
Sean Donahue
Sean Donahue

The analysis of known trends and uncertainties is critical when preparing the Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) section for annual reports on Form 10-K and quarterly reports on Form 10-Q. The SEC's Division of Corporation Finance (Corp. Fin.) routinely issues comments on the MD&A and, particularly, the need for them to discuss known trends and uncertainties. Recently, at a December 2013 conference hosted by the AICPA, the Corp. Fin. staff discussed appropriate disclosures about trends that may affect the return on pension plan assets, or the repatriation of earnings from foreign subsidiaries or that may require an impairment of goodwill or some other intangible. In addition, the SEC's Division of Enforcement is focusing on the adequacy of disclosure about known trends and uncertainties in the MD&A. In an October 2013 disclosure and accounting fraud case involving the MD&A, the U.S. District Court for the Southern

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