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Top SEC Accountant Defends Requiring SPAC Restatements

Dec. 6, 2021, 7:59 PM

The accounting problems that have prompted SPACs to issue mass corrections in the past month warrant so-called Big R restatements despite auditor arguments that the errors were minor, a top SEC official said Monday.

Hundreds of special purpose acquisition companies have tripped over accounting rules on how to classify certain shares they issue to investors. Most SPACs classified the shares in permanent equity, but they had features that required them under ASC 480 to be considered temporary equity.

The blank-check companies and their auditors initially tried to fix the errors with what are referred to as small-R revisions—minor corrections that ...