Reporting order of financial statements in SEC filings: Evidence from 10-K filings of S&P 500 entities

Abstract

The current accounting regulations are silent about the order of financial statements reported in SEC filings, although some SEC regulations deal with reporting requirements for the SEC filings of public entities (i.e., S-K), and formats and content of financial reports (i.e., S-X). We investigate the order of financial statements reported in 10-K filings and identify factors associated with such order based on a manually collected sample of S&P 500 entities. We find that more than half of entities report an income statement in the beginning, while a large number of entities still report a balance sheet as the first financial statement. We also document that larger entities and entities with more investment in tangible assets and R&D are more likely to list an income statement first. On the other hand, entities with larger shareholders’ equity (relative to total assets) tend to report a balance sheet in the beginning. However, profitability does not appear to be related to the order of financial statements. Findings of this study should be of interest to academia, financial statement users and policy makers.