Inside SEC reporting: Acquisitions and divestitures

May 13, 2025

Guest

Scott Feely

Guest

Liz Crego

Scott Feely, a seasoned partner at PwC with over three decades in SEC and financial reporting, and Liz Crego, the US Deals Clients and Markets leader, dive into the complexities of acquisitions and divestitures. They cover the volatile M&A landscape and the critical reporting requirements under US GAAP and SEC rules. Key highlights include the significance test, Form 8-K obligations, and practical insights for navigating financial documentation during these transactions. Their discussion emphasizes the need for meticulous planning and collaboration in today’s unpredictable market.

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INSIGHT

SEC vs GAAP Business Definition

The SEC's definition of a business can be broader than GAAP's definition, especially in sectors like biotech.
This divergence can impact how acquisitions are classified and reported under SEC rules versus US GAAP.

ADVICE

8-K Filing for Acquisitions

File an 8-K within four business days after a significant business acquisition.
Include basic acquisition details like transaction date, business description, counterparty, and consideration.

INSIGHT

Three-Part Significance Test

The SEC's significance tests for acquisitions include investment, asset, and income-based measures.
The income test has two sub-parts and takes the lower value, providing a balanced view of transaction significance.

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A video of this podcast is available on YouTube, Spotify, or PwC’s website at viewpoint.pwc.com.

We continue our video podcast miniseries focused on SEC reporting, helping you stay current on the evolving SEC landscape while taking a “back to basics” look at key reporting areas.

In today’s episode, we discuss acquisitions and divestitures—transactions that often involve complex reporting requirements. We cover technical guidance and practical implications for a range of deal-related topics, including significance tests, carve-out financials, spin-off considerations, and more. In a deal environment that is both volatile and diverse, understanding reporting nuances is essential for staying ahead of regulatory requirements and market expectations.

In this episode, we discuss:

2:39 – Overview of the current M&A environment
6:50 – Distinctions between business acquisitions under US GAAP and SEC rules
9:58 – Reporting considerations for significant acquisitions, including:
- 16:07 – Applying the three-part significance test
- 23:20 – Requirements tied to Form 8-K, registration statements, and Form S-4
- 31:02 – Practical M&A insights
38:31 – Divestiture reporting and carve-out financial statement considerations
49:30 – Standalone reporting for divested businesses, including spin-offs, subsidiary IPOs, and private sales.

In case you missed it – check out the first episode of this video podcast miniseries, Inside SEC reporting: Capital formation. Be sure to follow this podcast on your favorite podcast app and subscribe to our weekly newsletter for the latest thought leadership.

About our guests

Scott Feely is a partner in PwC’s National Office. He has over 30 years of experience supporting clients as they address the SEC and financial reporting implications of their capital markets and merger and acquisition-related activities.

Liz Crego is a seasoned deals advisor and our US Deals Clients and Markets leader who specializes in accounting and financial reporting associated with complex global transactions, including divestitures, capital raising activities, and M&A across sectors.

About our guest host

Kyle Moffatt is PwC’s Professional Practice leader, leading a team responsible for working with standard setters and regulators as well as delivering brand-defining thought leadership and educational materials. He also consults with engagement teams and audit clients on SEC reporting matters. Before PwC, Kyle spent almost 20 years with the SEC, most recently as Chief Accountant and Disclosure Program Director in the Division of Corporation Finance.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com