This Financial Reporting Alert discusses the accounting and SEC reporting considerations related to special-purpose acquisition company (SPAC) initial public offerings. After a SPAC merges with a private operating company (the “target”), the target’s financial statements become those of the combined public company. Therefore, a target will need to devote a considerable amount of time and resources to technical accounting and reporting matters.

This publication was updated on September 14, 2021, to address additional accounting considerations. Note that it was also updated on February 10, 2021; March 19, 2021; March 25, 2021; and April 30, 2021, to reflect additional interpretive guidance on financial statement presentation for reverse recapitalizations, accounting for shares and warrants issued by a SPAC, classifying share-settleable earn-out arrangements, share-based payment considerations, and the availability of nonpublic review for registration statements on Form S-4. It also includes considerations related to CF Disclosure Guidance Topic 11 as well as recently adopted amendments to Regulation S-K. Text that has been added or amended since this publication’s initial issuance has been marked with a boldface italic date in brackets.

This publication was released by our US firm.

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