What is 20-F?

1423 reads · Last updated: December 5, 2024

SEC Form 20-F is a form issued by the SEC that must be submitted by all "foreign private issuers" with listed equity shares on exchanges in the U.S.

Definition

The 20-F is an annual report that foreign private issuers must file with the U.S. Securities and Exchange Commission (SEC). This report includes audited financial statements and a detailed description of the company's business, similar to the 10-K report for U.S. companies.

Origin

The origin of the 20-F form dates back to the Securities Exchange Act of 1934, which required foreign companies to provide transparent financial information when listing on U.S. securities markets. The format and requirements of the 20-F have been revised multiple times over the years to adapt to changes in the international market.

Categories and Features

The 20-F is primarily used for annual information disclosure by foreign companies listed in the U.S. Its features include: 1) providing audited financial statements to ensure the accuracy of financial information; 2) detailed descriptions of the company's business operations, risk factors, and Management's Discussion and Analysis (MD&A); 3) compliance with International Financial Reporting Standards (IFRS) or U.S. Generally Accepted Accounting Principles (GAAP).

Case Studies

Case Study 1: Alibaba Group files a 20-F annually to disclose its financial status and business operations. Through the 20-F, investors can understand Alibaba's revenue sources, market share, and future development plans. Case Study 2: Swiss pharmaceutical company Novartis also files a 20-F, providing detailed financial information and strategic direction for its global operations, helping investors assess its performance in the U.S. market.

Common Issues

Common issues investors face when reading the 20-F include: 1) how to interpret financial statements under different accounting standards; 2) how to evaluate the risk factors disclosed by the company. Investors should carefully read the Management's Discussion and Analysis section to better understand the company's financial health and future prospects.

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Interest Rate Swap

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