Division of Corporation Finance:
Manual of Publicly Available
Telephone Interpretations

Second Supplement
March 2000

This is the second supplement to the Division of Corporation Finance's telephone interpretation manual. Additional supplements are also available on the website. This supplement contains a new interpretation issued by members of the staff in response to recent telephone inquiries. Positions expressed may change without notice. Please also see the statement on the first page of the complete manual regarding the non-binding nature of telephone interpretations. The interpretations in these supplements eventually will be integrated with the interpretations in the manual. In the interim, we have added an "S" to each number assigned to an interpretation so that references to an interpretation will clearly indicate that the interpretation is located in a supplement rather than the manual.

Regulation S-K

5S. Item 303 of Regulation S-K
Year 2000 Disclosure Update

In August of 1998, we provided guidance for public companies with respect to their disclosure obligations about Year 2000 issues and consequences. See Securities Act Release No. 7558. The following discussion provides guidance with respect to public companies' ongoing Year 2000 disclosure obligations under Release No. 7558.

Q:	Do all companies have to continue to provide the disclosure the release describes?
A:	No. A company must only continue to provide Year 2000 disclosure if: the company's remediation or preparation for the date change or actual date change events had a material effect on the company's business, financial condition or results of operations, or the company reasonably believes that Y2K related issues and consequences may have a material effect on the company's business, results of operations or financial condition.
Q:	Must all companies update the disclosure they made in response to the release?
A:	No. A company should update its disclosure if it reasonably believes disclosure is necessary to make other statements the company has made not misleading.
Q:	Do all companies have to report what occurred on Y2K critical dates such as January 1, 2000?
A:	No. A company should provide disclosure if the effects of the date change had, or the company reasonably believes the problems will have, a material effect on the company's business, financial condition or results of operations.
Q:	What disclosure should a company provide with respect to the known effects of Y2K?
A:	A company should provide disclosure with respect to any material Y2K related effects on its business, financial condition or results of operations. Companies should follow the guidance of Items 101 and 303 of Regulation S-K when providing disclosure.
Q:	What disclosure should a company provide about the effects of Y2K that may have occurred internally or with third parties but of which the company is not yet aware?
A:	A company should assess the probability of undiscovered problems and provide disclosure if it reasonably believes the problems could have a material effect on its business, financial condition or results of operations.
Q:	Securities Act Release No. 7558 does not specifically address dates other than January 1, 2000. Do all companies have to continue to address assessment, risk, cost and contingency plans for any other critical Y2K dates such as February 29, 2000?
A:	No. Each company should apply the analysis of Item 303 of Regulation S-K to its particular facts and circumstances. If the company determines that it should provide disclosure under that analysis, then the company should follow the guidance of Release No. 33-7558 as to the appropriate disclosure.

http://www.sec.gov/interps/telephone/phonesupplement2.htm