According to the WSJ, the SEC is considering a proposal to allow public companies to issue earnings reports semiannually, moving away from the current quarterly requirement.
In the past year, there has been increasing discussion about making the over 50-year-old quarterly reporting rule optional. Companies often express concerns about the costs and demands of preparing quarterly earnings reports. This requirement is also believed to be a factor in some companies’ decisions to remain private longer.
Supporters of the change hope that shifting to a semiannual reporting requirement will encourage more companies to go public, as it could simplify the process of maintaining public company status. Both SEC Chairman Paul Atkins and President Trump have shown support for this idea. The Journal notes that the SEC has begun talks with exchanges about potential future steps, although any changes are not imminent.
If the SEC moves forward with its proposal, which could happen in the coming weeks, it will undergo a public comment period followed by a vote. The Journal highlights that there is precedent for such a change, as both the European Union and the U.K. eliminated mandatory quarterly reporting about a decade ago, opting for semiannual disclosures, although many companies in these regions still choose to report quarterly.
