On January 30, 2020, the U.S. Securities and Exchange Commission
(“SEC”) provided guidance on the disclosure of key
performance indicators (“KPIs”) in Management’s
Discussion and Analysis of Financial Condition and Results of
Operations (“MD&A”). This guidance will become
effective on the date of its publication in the Federal Register,
which is expected shortly, and will be applicable to annual reports
on Form 10-K and Form 20-F and quarterly reports on Form 10-Q.
As companies prepare for the 2020 annual reporting season, here
are practice pointers based on the
SEC’s guidance:
KPIs: KPIs should be disclosed in MD&A
if necessary to an understanding of the company’s financial
condition or results of operations, or if KPIs enhance a
reader’s understanding of MD&A. In particular, any KPIs
that a company already includes in earnings releases should also be
considered for inclusion in the company’s MD&A. The SEC
highlighted the following as examples of KPIs to which
