Okla. Admin. Code § 660:11-15-1

Current through Vol. 41, No. 19, June 17, 2024

Section 660:11-15-1 - General rules for presentation of financial statements

(a)Asset values. The following rules shall apply in presenting asset values in all Financial Statements filed with the Department:

(1) A unilateral "write-up" of assets above historical cost is not considered in accordance with generally accepted accounting principles. Financial Statements containing a "write-up" of assets to appraisal values (irrespective of the soundness of the appraisal) shall not be accepted.

(2) A registrant acquiring assets in an "arms-length" transaction, solely or partly for its own capital stock, should record the transaction in its Financial Statements at either:

(A) the fair market value of the shares of stock given in consideration, or

(B) the fair market value of the asset so acquired.

(C) The amount selected should be one that has the preponderance of evidence substantiating its selection.

(3) Where a parent company (one owning more than 50% of other companies) or a subsidiary company or an affiliated company is the registrant, consolidated or combined Financial Statements shall be submitted. The consolidated statements must conform to generally accepted accounting principles and result in the elimination of "write-ups" or appraisal amounts not represented by "arms-length" transactions.

(4) Where the "promoters" of a registrant have transferred assets to the registrant solely or partly for capital stock, the tests referred to in (1), (2) and (3) of this subsection must be applied so as to result in either no "write-up" or one not greater than would have resulted from a transaction carried out at "arms-length." The registrant shall make full disclosure of all pertinent facts and substantiate the values used in its Financial Statements if not representing "historical cost" of acquisition from third parties.

(b)Opinion of independent accountants. Audited Financial Statements shall be accompanied by an opinion of the Independent Accountant. The opinion letter shall be dated, shall be manually signed, shall identify without detailed enumeration the Financial Statements covered by the opinion, shall state that the examination was conducted in accordance with generally accepted auditing standards and shall express the Independent Accountant's opinion as to the fairness or unfairness of the Financial Statements in accordance with generally accepted accounting principles or his inability to express such an opinion.

Okla. Admin. Code § 660:11-15-1

Added at 21 Ok Reg 2532, eff 7-1-04