1、Accounting & Reporting Considerations for U.S. IPODavid TaylorGlobal Capital Markets GroupAsia/Pacific Theater LeaderOctober 17, 2005222U.S. IPO ConsiderationsAgendaAttraction of the U.S. Securities MarketAttraction of the U.S. Securities MarketPage 3Page 3Typical IPO ProcessTypical IPO ProcessPage
2、4Page 4Major IssuesMajor IssuesPage 16Page 16Success FactorsSuccess FactorsPage 19Page 19Global Capital Markets GroupGlobal Capital Markets GroupPage 21Page 21333U.S. IPO ConsiderationsAttraction of the U.S. Securities Market Volume, breadth and sophistication of the market Enhanced share values Inc
3、reased name recognition / product marketing Timely access to favorable markets Mergers with U.S. companies Exit strategy Access to additional capital444U.S. IPO ConsiderationsTypical IPO StagesTypical IPO Process555U.S. IPO ConsiderationsTypical IPO ProcessI. Planning & ConsiderationsII. Selection o
4、f the Registration / IPO TeamIII. U.S. GAAP Conversion IV. Audit under PCAOB StandardsV. Registration Statement Financial Information & OFRPVI. Confidential Filing and SEC CommentsVII. Comfort LetterVIII. Road Show and Offering666Typical IPO ProcessI. Planning & Considerations Corporate actions (e.g
5、. sale of asset, tax planning) Development of a good reputation Resolution of legal matters Development of a long-term compensation plan Improvement of financial reporting systems Improvement of internal control Robust corporate governance procedures Availability of financial statements and data777T
6、ypical IPO ProcessII. Selection of the Registration / IPO Team Company personnel Independent accountants Attorneys Investment banks Underwriters counsel Investor relations Other experts Printer Depository Bank888Typical IPO ProcessIII. U.S. GAAP ConversionRequired Financial StatementsReconciliation-
7、 Three years of K GAAP audited financial statements(B/S, P/L, C/F Statement)- Two years reconciled to U.S. GAAPFull U.S. GAAP- Two years of U.S. GAAP audited financial statements999Typical IPO ProcessIV. Audit under PCAOB StandardsIntegrated Audit opinions expressed onFinancial Statementsi) financia
8、l position, ii) result of operations, andiii) cash flowsInternal Control over Financial Reporting Managements assessment of own internal control Effectiveness of internal control101010Typical IPO ProcessV. Registration StatementFinancial Information (may be) Needed Selected financial information Sep
9、arate financial statements of business acquired or to be acquired Interim financial statements Pro forma financial information Capitalization and indebtedness111111Typical IPO ProcessV. Registration Statement, continuedOperating and Financial Review and Prospects Operating results Liquidity and capi
10、tal resources R&D, patents and licenses, etc. Off balance sheet arrangements Disclosure of contractual obligations121212Typical IPO ProcessVI. Confidential Filing and SEC CommentsConfidential Filing Applicable for foreign private issuers SEC review takes 4 to 6 weeks Several rounds of comments expec
11、tedMajor Areas of Comments Risk factors OFRP Business Accounting and reporting131313Typical IPO ProcessVII. Comfort Letter To help investment bank perform financial due diligence The letter describes i) procedures performed, and ii) representations about financial statements and information Two form
12、al comfort letters oni) The effective date of the registration statementii) The closing date of the offering141414Typical IPO ProcessVIII. Road Show and Offering Build interest in the initial offering and the after-market Quiet period restrictions on promotional activities Red Herring a preliminary
13、prospectus Tombstone Ads Pricing Final prospectus filing Underwriting agreement signed Public offering begins151515Typical IPO ProcessTypical IPO Timetable (Rapid) - IllustrationPlanningUS GAAP ConversionAudit PCAOB StandardsPreparation of Registration StatementConfidential FilingSEC CommentsComfort
14、 LetterRoad ShowEffectivenessOfferingProcess Mo 1 Mo 2 Mo 3 Mo 4 Mo 5 Mo 6 Mo 7 Mo 9Mo 8161616U.S. IPO ConsiderationsTypical IPO StagesMajor Issues171717U.S. GAAP / Reporting IssuesMajor Issues Revenue recognition Business combination Consolidation of variable interest entities Carve-out issues Valu
15、ation and impairment of asset, goodwill and intangible Research and development expense Deferred tax assets and realization Related party transactions Derivative financial instruments181818Sarbanes-Oxley Act RequirementsMajor IssuesSection 302 - CEO / CFO certifies that he/shei) is responsible for e
16、stablishing and maintaining disclosure controls and procedures (“DC&P), ii) has designed DC&P to ensure specified information is made known to them, and iii) evaluated and reported on the effectiveness of those controls and procedures as of a date within 90 days of the report filing.Section 404 - Ma
17、nagement must state i) their responsibility for establishing and maintaining an adequate internal control structure and procedures over financial reportingii) their assessment as of the end of the fiscal year of the effectiveness of such internal control structure and procedures, andiii) the issuers
18、 external auditor is to attest to and report on managements assessment and effectiveness of the control.191919U.S. IPO ConsiderationsTypical IPO StagesSuccess Factors202020U.S. IPO ConsiderationsSuccess Factors Story of the company Good planning in advance Choice of advisors with experience and reso
19、urce Commitment of top management Experience and commitment of the employee Good project management and communication Change management212121U.S. IPO ConsiderationsTypical IPO StagesGlobal Capital Markets Group222222U.S. IPO ConsiderationsGlobal Capital Markets GroupHONG KONGSINGAPOREUKUSABRAZILISRAELRUSSIACHILENETHERLANDSSWITZERLANDFRANCEGERMANYNORWAYBELGIUMARGENTINADENMARKITALYJAPANKOREATAIWANCHINASOUTH AFRICAMEXICOSPAINAUSTRALIA232323U.S. IPO ConsiderationsQ & A242424
