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Financial Reporting Alert 20-6 (Updated) — Accounting and SEC reporting considerations for SPAC transactions

Published on: 14 Sep 2021

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 SPAC, classifying share-settleable earn-out arrangements, and share-based payment considerations.

On March 25, 2021, this alert has been updated to reflect additional interpretive guidance on accounting for shares and warrants issued by a SPAC. 

On April 30, 2021, this alert has been updated to reflect the SEC staff’s March 31 and April 12, 2021, statements regarding special-purpose acquisition companies (SPACs) and to provide additional examples and clarifications related to the accounting for shares and warrants issued by SPACs.

On September 14, 2021, this alert has been updated to address additional accounting and financial reporting considerations.

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