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.

On February 10, 2021, this alert has been updated to reflect additional interpretive guidance on financial statement presentation for reverse recapitalizations, classifying share settleable earn-out arrangements, 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.

On March 19, 2021, this alert has been updated to reflect additional interpretive guidance on accounting for shares and warrants issued by a special-purpose acquisition company (SPAC), classifying share-settleable earn-out arrangements, and share-based payment considerations.

This publication was updated on September 14, 2021, to address additional accounting considerations and 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.

This publication was released by our US firm.