Angela Storm, partner at KPMG LLP, participated in a video interview in conjunction with Nareit’s REITwise: 2023 Law, Accounting & Finance Conference held March 21-23 in Phoenix, Arizona.
Storm said that the SEC has April 2023 listed on its official agenda as the release date for its climate risk disclosure final rule, but that “most folks that are following this really closely…don’t expect to see anything much before summer.”
Turning to SEC comment letter trends, Storm said there’s been an uptick this year in comment letters related to climate risk factor disclosures.
“That’s the biggest new comment, but we’re still seeing lots of comments in MDNA (management’s discussion & analysis), we’re still seeing lots of comments in non-GAAP (generally accepted accounting principles),” she said.
Storm added that KPMG often sees non-GAAP comments “pop to number one” in the real estate space.
“Of late, the focus has really been on adjustments to non-GAAP measures and whether companies are making adjustments that could be considered normal, recurring, cash-operating expenses,” she said. “Because those adjustments are a no-no for non-GAAP measures.”
Storm also said that the best thing a company can do when it receives a comment letter is to establish a relationship with its examination team.