To Members of Nareit’s Accounting Committee and Regulatory Subcommittee:

On Jan. 30, 2020, the SEC proposed amendments to Management’s Discussion and Analysis (MD&A) requirements and reporting of selected financial data and supplementary financial information under Regulation S-K (MD&A Proposal). Comments will be due 60 days after the MD&A Proposal is published in the Federal Register, likely to occur later this month. Nareit invites interested members to join a Nareit task force that will evaluate the Proposal and consider whether Nareit should comment. Please indicate your interest in participating in the MD&A task force here.

The MD&A Proposal was developed in conjunction with the SEC’s ongoing Disclosure Effectiveness Initiative, announced in 2012, for the purpose of improving the SEC’s disclosure regime for both investors and registrants. Nareit has strongly endorsed the SEC’s Disclosure Effectiveness Initiative and has submitted six comments to the SEC responsive to proposals issued as part of this effort. Notably, Nareit’s 2016 Comment to the SEC in response to its Disclosure Update and Simplification Update is cited six times in the MD&A Proposal, which includes proposed changes suggested by Nareit, including the revision of Item 301 disclosures and the elimination of section 302(a).

Key elements of the SEC’s MD&A Proposal, would, if adopted:

  • Eliminate Regulation S-K Item 301 (selected financial data) and Item 302 (supplementary financial data);
  • Eliminate Item 303(a)(5) (Tabular disclosure of contractual obligations);
  • Add a new disclosure requirement to Item 303 (Critical accounting estimates) to clarify and codify existing Commission guidance in this area;
  • Replace Item 303(a)(4) (Off-balance sheet arrangements) with a principles-based instruction to prompt registrants to discuss off-balance sheet arrangements in the broader context of MD&A; and
  • Revise the interim MD&A requirement in Item 303(b) to provide flexibility by allowing companies to compare their most recently completed quarter to either the corresponding quarter of the prior year (as is currently required) or to the immediately preceding quarter.

The SEC also simultaneously issued guidance (Guidance) regarding the disclosure of key performance indicators and metrics in MD&A. The guidance becomes effective immediately upon publication in the Federal Register.

The Guidance advises issuers that disclosures accompanying key performance metrics in MD&A should include:

  • A clear definition of the metric and how it is calculated;
  • A statement indicating the reasons why the metric provides useful information to investors; and
  • A statement indicating how management uses the metric in managing or monitoring the performance of the business.

Please do not hesitate to contact Victoria Rostow, SVP, Regulatory Affairs & Deputy General Counsel (; Christopher Drula, SVP, Financial Standards (; or George Yungmann, SVP, Financial Standards ( with any questions.