Streamline and modernize MD&A.

A primary purpose of MD&A, according to the SEC, is to enable investors to more clearly see the company from the perspective of management. As such, the amended rules expressly set forth a number of "objectives" of MD&A, including the following:

To "provide material information relevant to an assessment of the financial condition and results of operations of the registrant, including an evaluation of the amounts and certainty of cash flows from operations and from outside sources."
To shed light on "material events and uncertainties known to management that are reasonably likely to cause reported financial information not to be necessarily indicative of future operating results or of future financial condition."
To present and assess "financial statements and other statistical data that the registrant believes will enhance a reader's understanding of the registrant's financial condition, cash flows, and other changes in financial condition and results of operations."

The "reasonably likely" disclosure standard. The SEC stated, in its release announcing the adoption of the final rules, that it continues to believe the "reasonably likely" threshold is the appropriate standard for prospective matters and forward-looking information required under the MD&A rules. Referring to its existing "two-step test" for analyzing whether this threshold has been met, the SEC elaborated on the disclosure standard as follows:

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Regulation S-K Gets a Facelift

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