[Code of Federal Regulations]

[Title 12, Volume 6]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR630.40]



[Page 298-301]

 

                       TITLE 12--BANKS AND BANKING

 

                 CHAPTER VI--FARM CREDIT ADMINISTRATION

 

PART 630_DISCLOSURE TO INVESTORS IN SYSTEMWIDE AND CONSOLIDATED BANK 

DEBT OBLIGATIONS OF THE FARM CREDIT SYSTEM--Table of Contents

 

                Subpart C_Quarterly Reports to Investors

 

Sec. 630.40  Contents of the quarterly report to investors.





    (a) General. The quarterly report to investors shall contain the 

information specified in this section along with any other material 

information necessary to make the required disclosures, in light of the 

circumstances under which they are made, not misleading. The quarterly 

report must be presented in a format that is easily understandable and 

not misleading.

    (b) Rules for condensation. For purposes of this subpart, major 

captions to be provided in interim financial statements are the same as 

those provided in the financial statements contained in the annual 

report to investors, except that the financial statements included in 

the quarterly report may be



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condensed into major captions in accordance with the rules prescribed 

under this paragraph.

    (1) Interim balance sheets. When any major balance sheet caption is 

less than 10 percent of total assets and the amount in the caption has 

not increased or decreased by more than 25 percent since the end of the 

preceding fiscal year, the caption may be combined with others.

    (2) Interim statements of income. When any major income statement 

caption is less than 15 percent of average net income for the 3 most 

recent fiscal years and the amount in the caption has not increased or 

decreased by more than 20 percent since the corresponding interim period 

of the preceding fiscal year, the caption may be combined with others. 

In calculating average net income, loss years should be excluded. If 

losses were incurred in each of the 3 most recent fiscal years, the 

average loss shall be used for purposes of this test.

    (3) The interim financial information shall include disclosure 

either on the face of the financial statements or in accompanying 

footnotes sufficient to make the interim information presented not 

misleading. It may be presumed that users of the interim financial 

information have read or have access to the audited financial statements 

for the preceding fiscal year, and the adequacy of additional disclosure 

needed for a fair presentation may be determined in that context. 

Accordingly, footnote disclosure that would substantially duplicate the 

disclosure contained in the most recent audited financial statements 

(such as a statement of significant accounting policies and practices) 

and details of accounts that have not changed significantly in amount or 

composition since the end of the most recently completed fiscal year may 

be omitted.

    (4) Interim reports shall disclose events that have occurred 

subsequent to the end of the most recently completed fiscal year that 

have a material impact on the System. Disclosures should encompass, for 

example, significant changes since the end of the most recently 

completed fiscal year in such items as accounting principles and 

practices, estimates used in the preparation of financial statements, 

status of long-term contracts, capitalization, significant new 

indebtedness or modification of existing financing agreements, financial 

assistance received, significant business combinations and liquidations 

of System institutions, and terminations of System institution status. 

Notwithstanding the provisions of this paragraph, where material 

contingencies exist, disclosure of such matters shall be provided even 

though a significant change since yearend may not have occurred.

    (5) In addition to meeting the reporting requirements specified by 

existing accounting pronouncements for accounting changes, state the 

date of any material accounting change and the reasons for making it.

    (6) Any material prior period adjustment made during any period 

covered by the interim financial statements shall be disclosed, together 

with its effect upon net income and upon the balance of surplus for any 

prior period included. If results of operations for any period presented 

have been adjusted retroactively by such an item subsequent to the 

initial reporting of such period, similar disclosure of the effect of 

the change shall be made.

    (7) Interim financial statements furnished shall reflect all 

adjustments that are necessary to a fair statement of the results for 

the interim periods presented. A statement to that effect shall be 

included. Furnish any material information necessary to make the 

information called for not misleading, such as a statement that the 

results for interim periods are not necessarily indicative of results to 

be expected for the year.

    (8) If any amount that would otherwise be required to be shown by 

this section with respect to any item is not material, it need not be 

separately shown. The combination of insignificant items is permitted.

    (c) Discussion and analysis of interim financial condition and 

results of operations. Discuss any material changes to the information 

disclosed to investors pursuant to Sec. 630.20(g) that have occurred 

during the periods specified in



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paragraphs (d)(1) and (d)(2) of this section. Provide any additional 

information needed to enable the reader to assess material changes in 

financial condition and results of operations between the periods 

specified in paragraphs (d)(1) and (d)(2) of this section.

    (1) Material changes in financial condition. Discuss any material 

changes in financial condition from the end of the preceding fiscal year 

to the date of the most recent interim balance sheet provided.

    (2) Material changes in results of operations. Discuss any material 

changes in the combined results of operations of the System with respect 

to the most recent fiscal year-to-date period for which an income 

statement is provided and the corresponding year-to-date period of the 

preceding fiscal year. Such discussion shall also cover material changes 

with respect to the most recent fiscal quarter and the corresponding 

fiscal quarter in the preceding fiscal year.

    (d) Financial statements. Interim combined financial statements 

shall be provided in the quarterly report to investors as set forth in 

paragraphs (d)(1) through (4):

    (1) An interim balance sheet as of the end of the most recent fiscal 

quarter and a balance sheet as of the end of the preceding fiscal year.

    (2) Interim statements of income for the most recent fiscal quarter, 

for the period between the end of the preceding fiscal year and the end 

of the most recent fiscal quarter, and for the comparable periods for 

the previous fiscal year.

    (3) Interim statements of changes in capital stock and surplus (or, 

if applicable, interim statements of changes in protected borrower 

capital and capital stock and surplus) for the period between the end of 

the preceding fiscal year and the end of the most recent fiscal quarter, 

and for the comparable period for the preceding fiscal year.

    (4) Interim statements of cash flows for the period between the end 

of the preceding fiscal year and the end of the most recent fiscal 

quarter, and for the comparable period for the preceding fiscal year.

    (e) Supplemental information. The interim report shall present 

supplemental information in accordance with the requirements of Sec. 

630.20 (m)(2), (m)(3), and (m)(4), as well as other requirements and 

instructions of the FCA, and shall include, at a minimum, the following:

    (1) Supplemental balance sheet information as of the end of the most 

recent quarter; and

    (2) Supplemental income statement information for the period between 

the end of the preceding fiscal year and the end of the most recent 

fiscal quarter.

    (f) Review by independent public accountant. Unless otherwise 

ordered by the FCA as a result of a supervisory action, the interim 

financial statements and supplemental information need not be audited or 

reviewed by an independent public accountant prior to filing. If, 

however, a review of the report is made in accordance with the 

established professional standards and procedures for such a review, a 

statement that the independent accountant has performed such a review 

may be included. If such a statement is made, the report of the 

independent accountant on such review shall accompany the interim 

financial information.



 Appendix A to Part 630--Supplemental Information Disclosure Guidelines



    Supplemental information required by Sec. Sec. 630.20(m) and 

630.40(e) shall contain, at a minimum, the current year financial data 

for the components listed in the following tables and be presented in 

the columnar format illustrated in the following tables:



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[GRAPHIC] [TIFF OMITTED] TR12SE94.000





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